Oil pinned to lows, WTI near $70.50

Oil prices headed south on Wednesday and WTI prices have been pinned to new lows after knocking into the 70.00 major handle. West Texas is now brooding near 70.75 in early Thursday action as oil bulls struggle to gather enough steam for a recovery.

According to the Energy Information Administration (EIA) on Wednesday, the US' oil reserves tumbled by 12.6 million barrels, bringing the US stocks total supply down to 405 million barrels. A continued outage from the Syncrude facility in Canada is largely held responsible for the draw on reserves, putting pressure on crude production supplies in Oklahoma.

Despite the decline in US barrel counts, oil prices slipped steadily yesterday, driven down by trade tensions between the US and China which are once again on the rise as the US prepares another volley of tariffs on Chinese imports, this time targeting $200 billion USD of Chinese goods. China has already stated that they are dedicated to responding in kind to any tariffs from the US, and the trade war is heating up, with the next batch of tariffs due to come into effect after the eight-week public questioning period.

Commodities have been hammered by reciprocal tariffs between the world's two largest economies, and bulls are in full retreat as markets try to scrape themselves back together.

WTI levels to watch

West Texas crude is steeply off of recent highs, with WTI collapsing nearly 5% on Wednesday. Current action is being capped off at 75.35, a multi-year high for the commodity, while a continued push lower will be facing a popular support-resistance zone from 66.70 to 63.50.