WTI struggles at weekly top above $78.00 amid joint oil reserve release

WTI crude oil prices retreat to $78.40 after refreshing the weekly top during early Wednesday.

Announcements by the US, China and Japanese government leaders to use their Strategic Petroleum Reserve (SPR) join downbeat inventory data from industry reports and softer US dollar to challenge the oil traders of late.

US President Joe Biden touted the largest-ever release from the US SPR on Tuesday. Japan tracks the moves and announced plans to auction 4.2 million barrels of oil while China has previously marked the move to tame the inflation pressure, due to the energy prices.

“The United States said on Tuesday it would release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude,” said Reuters.

The weekly oil stockpile data from the American Petroleum Institute (API), 2.037M versus 0.655M prior, also exert downside pressure on the WTI crude oil prices.

It's worth noting that softer yields and the sluggish US Dollar Index (DXY) challenge the bearish bias over the oil prices.

Moving on, multiple US data and the weekly official oil inventories from the US Energy Information Administration (EIA), prior 26B, will be important to watch for immediate direction. Among the other catalysts, October Durable Goods Orders, the second estimate of the Q3 Gross Domestic Product, the latest FOMC Meeting Minutes and October core PCE inflation are the key to follow.

Technical analysis

In addition to a clear rebound from the 100-day EMA level of $74.85, sustained trading beyond 50-day EMA, around $78 by the press time, keeps WTI oil buyers hopeful to aim for the $80.00 psychological magnet.