WTI nears $50 amid increasing U.S. crude oil production
Crude oil prices remain under pressure on Wednesday after the weekly EIA report highlighted rising production in the United States. The barrel of WTI dropped to a new two-week low at $50.12 and is now trading at $50.30, recording a daily loss of 4%, or 2$.
Although U.S. crude stocks fell 1 million barrels in the week ending April 14, according to the U.S. Energy Information Administration, the increasing production output amid higher refining activity dragged crude oil prices lower. The report highlighted that U.S. production rose to 9.252 million barrels a day, highest since August 2015, while refineries operated at 92.9% of their operable capacity last week.
"It seems that the optimism in the oil market we have seen since the last few days of March is running out of steam," Tamas Varga, PVM Oil Associates analyst, told Reuters following the report.
Technical outlook
The barrel of WTI is facing the immediate support at $50 (psychological level) followed by $49.60 (Mar. 16 high) and $49 (Mar. 15 high). On the other hand, resistances could be found at $51.30 (Apr. 4 high), $51.90/$52 (Apr. 5 high/psychological level), and finally $52.65 (daily high).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
