WTI dips below $83.00 on the back of higher US stocks
- WTI futures depreciate beyond 1% to hit session lows below $83.00.
- Higher than expected US stocks have increased negative pressure on oil prices.
- WTI: testing support at $82.50.
Front-month WTI prices have extended their reversal from multi-year highs at 85.35 on Monday. Crude prices have depreciated more than 1% so far today, reaching session lows at $82.50.
US crude oil stocks increase beyond expectations
Commercial inventories of crude oil increased in the US by 4.3 million barrels last week, according to data released by the US Energy Information Administration. These figures represent a much higher increment than the 1.91 million barrels anticipated by market analysts and have added negative pressure on crude prices.
Oil prices have surged about 35% over the last two months, boosted by concerns that the global increase in demand due to the post-pandemic recovery will cause an energy crunch. Beyond that, the Organization of Petroleum Exporting Countries remains reluctant to increase supply, which has prompted some analysts to forecast crude prices near $100 by the end of the year.
WTI testing support at test support at $82.50 area
WTI futures have accelerated their reversal on Wednesday, retreating below $83.00 to seek support at 82.50. Below here, the next potential targets might be at 81.75 (October 22 low) and $80.80 (October 20 and 21 lows).
Alternatively, a bullish reaction from current levels would send the pair to retest intra-day highs at $84.20 ahead of October 25 high at $85.35, which would open the path towards the 90.00 psychological area.
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
