US commercial crude oil inventories dropped sharply by -9.5m barrels in the week ending July 5. That’s much larger decline than expectation of -1.9m barrels. At 459.0m barrels, U.S. crude oil inventories are about 4% above the five year average for this time of year.

WTI oil extends this week’s rebound and hits as high as 59.78 so far. It’ possibly set to retest key resistance zone of 60.03 and 61.8% retracement of 66.49 to 50.64 at 60.34. At this point, we don’t expect a firm break there yet. And consolidation pattern from 60.22 should extend with least another fall back to 56.06. In that case, downside should be contained above 54.86 support. Overall, range trading should continue.

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