US commercial crude oil inventories rose 3.5m barrels in the week ending January 24, versus expectation of 0.7m rise. At 431.7m barrels, crude oil inventories are about 2% below the five year average for this time of year.
WTI crude oil dips notably after the release but stays above 52.09 temporary low made earlier this week. At this point, while further fall is mildly in favor, we’d continue to look for strong support from 50.64, which is close to 61.8% retracement of 42.05 to 66.49 at 51.38, to contain downside and bring rebound. Break of 55.89 will indicate short term bottoming. However, sustained break of 50.64 will invalidate our view and open up the case for a test on 42.05 low.
