WTI OIL outlook: Oil remains in defensive after 5.7% drop on surprise crude stockpiles build
|WTI OIL
WTI oil consolidating on Thursday after falling 5.7% previous day (the biggest one-day drop since 27 Mar).
Oil price was hit by unexpected and strong build in US crude stockpiles (API report on Wednesday showed 8.7 million barrels rise against previous week's draw of 4.8 million barrels).
The data dampened hopes of demand recovery after pandemic lockdown, keeping the downside vulnerable.
Also, uncertainty over Russia's commitment to increase production cut ahead of important OPEC meeting on 9 June, adds to negative signals.
Recovery from contract's record low ($6.57) lost traction and oil price moved to sideways mode which extends into sixth day, keeping the action within 30/35 zone. Fading bullish momentum and south-heading stochastic on daily chart keep in play risk of deeper pullback which could be sparked by break of $30/$29.10 pivots (psychological/broken Fibo 38.2% barrier).
Markets focus today's EIA crude stocks report (1.9 mln bls f/c vs 4.9 mln bls last week) which could put oil price under increased pressure on upside surprise. On the other side, bearish threats would be sidelined if crude inventories fall in line/below forecast.
Break of recent recovery highs ($34.61/77) would expose targets at $36.08 (50% retracement of $65.63/$6.52) and $36.42 (falling 100DMA).
Res: 33.18; 34.29; 34.77; 36.08
Sup: 30.57; 30.00; 29.10; 28.42
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