WTI justifies Wednesday’s Doji near three-month top, prints mild losses below $37.00

WTI stays mildly heavy around $36.74, down 0.46% on a day, while the European traders prepare for Thursday’s session.

The black gold rose to the highest since early-March on Wednesday but failed to keep the rise by the end of the day. As a result, it formed a Doji candlestick that suggests the pullback in oil prices. While following the same, the energy benchmark portrays mild losses so far in Asia.

In doing so, the quote also ignores the upbeat weekly inventory details from the Energy Information Administration (EIA). The official stockpiles shrank 2.077 million barrels versus the forecast of 3.038 million barrels during the week ended on May 29. Additionally, news that BP is evacuating facilities in the Gulf of Mexico and can negatively affect the oil output has also been ignored so far.

The reason could be traced from the US dollar’s recovery from the multi-day low amid risk reset ahead of the key events like the ECB and the US Jobless Claims.

One should also know that OPEC and non-OPEC producers are likely to hold the Joint Technical Committee (JTC) and Joint Ministerial Monitoring Committee (JMMC) meetings around mid-June, versus the previous expectations of this week, per Reuters.

As a result, the oil prices are at the mercy of the greenback’s near-term moves while energy market updates might also offer additional clues for fresh impetus.

Technical analysis

With the trend reversal suggesting candlestick formation at multi-day high, coupled with overbought RSI conditions on the daily chart, sellers are waiting for a daily close below 100-day SMA level of $36.18 for fresh entries. In doing so, May 26 top near $34.91 could become their target. On the upside, a sustained run-up past-$38.30 will escalate the run-up to fill the gap below March 06 low of $41.22.