US commercial crude oil inventories dropped -1.1m barrels in the week ending June 28, higher than expectation of -2.8m barrels. At 468.5m barrels, crude oil inventories are about 5% above the five year average for this time of year.
WTI crude oil stays soft after the release. It tumbled earlier this week as market is concerned that the output cut announced by OPEC+ would not be sufficient to correct the imbalance driven by the global economic slowdown. (More in this report)
Technically, a short term top should be formed at 60.22 after rejection by resistance zone between 60.03 and 61.8% retracement of 66.49 to 50.64 at 60.34. WTI is also back below both 55 day and 4 hour 55 EMA. Deeper fall is now mildly in favor to 54.86 resistance turned support.
For now, we’re slightly favoring the case the decline from 66.39 has completed at 50.64. Thus, we’d look for strong support below 54.86 to contain downside to bring rebound. Near term outlook will, for now, stays neutral until a break of 50.64 or 60.22.
