The US EIA crude oil inventories figure (the week ending April 7) released on Wednesday, saw the biggest drop in 2.166 million barrels this year.
However, the figure failed to push oil prices higher. WTI and Brent crude oil spot retraced around 1%, and 1.13% respectively on Wednesday.
The reasons for the fall comprise both technical and fundamental factors.
Technically oil prices were trading at the mid-term major resistance zone, where the selling pressure is heavy.
Fundamentally, markets concern whether OPEC will extend the output cut agreement in the May meeting. In addition, the oil supply has been continuously increasing from the thriving US shale industry and some other non-OPEC oil producers.
The price range between 53.00 – 55.00 is the mid-term major resistance zone for WTI spot, where the pressure is heavy.
On the 4-hourly chart, WTI spot broke the downside uptrend line support on Wednesday, indicating the bullish momentum is likely to be restrained at this zone.
The daily Stochastic Oscillator reading is above 80, suggesting a retracement.
The resistance level is at 53.50, followed by 54.00 and 54.50.
The support line is at 53.20, followed by 53.00 and 52.50.