WTI plunges below $55 amid massive buildup in US crude oil stock
|- Crude inventories rose by 6.5 million barrels in the U.S., according to the API.
- WTI pushes lower below $55 in post-settlement trade.
- Daily loss of WTI exceeds 3% on Tuesday.
Crude oil prices came under a renewed selling pressure in the late NA session after the API's weekly crude oil stock report revealed a large buildup in oil inventories in the U.S. After settling at $55.70, the barrel of West Texas Intermediate extended its losses and was last seen at $54.90, losing 3.35%, or $1.9, on the day.
"Crude inventories rose by 6.5 million barrels in the week to Nov. 10 to 461.8 million, compared with analysts' expectations for a decrease of 2.2 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.8 million barrels, API said," Reuters reported. Further details of the report revealed that refinery crude runs fell by 289,000 barrels per day and gasoline stocks rose by 2.4 million barrels while imports rose by 652,000 barrels per day to 8.1 million bpd.
Following last week's rally, the barrel of WTI struggled to preserve its momentum as rising production in the U.S. and today's IEA report offset the positive impact of hopes of OPEC deciding to extend its output cut deal to the end of 2018. Considering the potential adverse effect of warmer temperatures on oil consumption, the International Energy Agency (IEA) in its latest monthly report slashed its forecast for global demand by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.
Technical outlook
The barrel of WTI could encounter the initial support at $54.40 (20-DMA) ahead of $53.70 (Oct. 30 low) and $53 (psychological level). On the upside, resistances are located at $56 (psychological level), $56.75 (daily high) and $57.50 (Nov. 9 high).
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