- WTI stabilising towards a test of hourly cloud resistance at 56.55.
- Supply-side bias data from the EIA reports a larger-than-expected increase in crude oil stocks.
West Texas Intermediate crude for April dropped 34 cents, or 0.6%, to settle at $56.22bbls on the New York Mercantile Exchange overnight following data from the EIA that reported a larger-than-expected increase in crude oil stocks. The supply biased data sent prices to a low of $55.69bbls on a spot basis. However, prices were bid up from there and the price went on to rally to $56.63bbls before a mean reversion of the day's range back to $56.20bbls before drifting north to current levels.
The EIA reported that U.S. crude supplies climbed by 7.1 million barrels for the week ended March 1, above the average climb of 1.9 million barrels expected by analysts, although slightly under the 7.3 million barrel increase reported by the American Petroleum Institute data the prior day.
WTI's correction lacks momentum and prices remain fragile around the trend line support est.11th Feb. Bears can target 55.56 lows seen at the start of this month if bulls cannot break up through the hourly cloud. A slide below 55.56 opens the path to the 50 handle with the confluence of the 23.6% fibo target at 50.20. However, the 4hr outlook is more bullish with MACD and RSI leaning with a positive bias although criteria for an Ichimoku Cloud long was jeopardised with the price dropping below the cloud. On the upside, with support coming in at the 100-4hr SMA overnight, bulls have eyes on a target of the recent tops of 57.85/93 double-tops.
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