Oil hanging near recent highs, WTI hesitating near $66.50 on US supply figures

Joshua Gibson FXStreet

Crude oil has been working its way steadily higher, but barrels were given reason to pause after US production figures once again set another record.

According to the Energy Information Administration (EIA), US crude production hit a record 10.9 million barrels per day last week, and the US' crude output has lifted by 30% over the last twenty-four months, putting the country on pace to surpass Russia, the world's single largest producer of crude oil, who is estimated to have pumped 11.1 million bpd in the first two weeks of June.

On the flip side of the figures, and possibly supporting WTI prices, US consumption of gasoline also hit a recording high, climbing to 9.88 million bpd last week according to EIA estimates. With the steadily-strengthening crude output from the US, rising consumption is the only thing that will keep another surge of oversupply from spilling into the global marketplace. Crude prices were recently bolstered by Saudi Arabia and Russia publicly mulling over the possibility of reigning in intense OPEC-Russia production cuts, and a wave of US oil at this time could easily see markets flooded with crude once again.

WTI levels to watch

Despite production increases, crude oil is slowly grinding higher as it was supported at the 66.00 level throughout Wednesday before spiking up. The next hurdle to overcome for bulls is 66.85, the May 1 key swing low. If the bulls fail to break above this level we might see a consolidation phase in the coming days with supports seen at the 66.00 figure and 65.56 May 31 low. For now, the momentum remains bullish as Crude oil WTI is currently supported by the daily 100-period simple moving average.

Spot rate: 66.54
Relative change: 0.12%
High: 66.54
Low: 65.39

Trend: Bullish (needs to break 66.85)

Resistance 1: 66.85 May 1 key swing low
Resistance 2: 67.30 supply level
Resistance 3: 68.30 May 31 high

Support 1: 66.56 May 31 low
Support 2: 66.00 key support
Support 3: 64.12-63.72 demand zone

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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