WTI gains traction amid surprise US inventory draw and weaker US Dollar
|- WTI extends rebound for the second day, recovering from Monday’s multi-month low near $56.
- US crude inventories fell by 0.96 million barrels, according to EIA data, with gasoline and distillate stocks also down.
- Technical outlook remains bearish below the $60-$62 zone, though the RSI and MACD hint at early stabilization.
West Texas Intermediate (WTI) Crude Oil edges higher on Wednesday, extending gains for the second consecutive session as traders react to a surprise draw in US inventories. The recovery comes after WTI slipped to its lowest level since May 5 on Monday, when prices briefly dipped below the $56 mark amid concerns over potential supply glut and sluggish global demand.
At the time of writing, WTI trades around $58.43 per barrel, up nearly 1.50% on the day, as a softer US Dollar (USD) lends additional support to prices.
The latest data from the US Energy Information Administration (EIA) showed that commercial crude inventories fell by 0.96 million barrels in the week ending October 17, bringing total stocks down to 422.8 million barrels. Gasoline and distillate inventories also dropped by 2.1 million and 1.5 million barrels, respectively.
The draw across major fuel categories offered short-term support for Oil prices, offsetting persistent worries about oversupply. Recent projections from the International Energy Agency (IEA) highlight that global Crude supply continues to outpace demand, raising the risk of an inventory build-up through early 2026.
From a technical standpoint, the broader structure, however, still reflects a bearish bias, as prices remain below the cluster of short-term moving averages, with the 21-day SMA at $60.46, the 50-day at $62.03, and the 100-day at $64.22. The area around $60.00-$62.00, therefore, represents a heavy resistance zone.
A decisive daily close above this region could mark a shift in momentum, opening the door toward $64.00-$65.00 and potentially neutralizing the recent downtrend.
Momentum indicators are showing early signs of stabilization. The Relative Strength Index (RSI) has rebounded from near-oversold levels and currently stands around 41, suggesting that bearish momentum is fading but recovery momentum remains fragile.
Meanwhile, the Moving Average Convergence Divergence (MACD) histogram has narrowed, and the signal lines are flattening, hinting at the possibility of a bullish crossover in the coming sessions if buying pressure persists. On the downside, immediate support is seen at $57.00, followed by the May swing low near $55.00.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
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