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Oil climbs to near 4-month highs after Crude inventories decline

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The EIA inventory report delivered its second decline in three weeks helping oil prices rise to the highest level in almost four months. The data confirms that the cutting of oil exports by the Saudis is making the US use up their inventories. The weekly EIA release showed a decline of 3.9 million barrels from the prior week, well below the median estimate of a build of 3.0 million barrels and exceeding the lowest estimate which called for a decline of 2.7 million barrels.

Oil prices may have cleared a key hurdle and while the risks to the downside remain, we could see bullish momentum accelerate here. Rising US production concerns remain but oil may not focus on that in the short-term as we may continue to see draws with inventories.

West Texas Intermediate crude tentatively broke above the $58.00 level and if the bullish breakout continues, price could target the psychological $60 handle. Major resistance will come from the 200-day SMA which currently trades at the $62.08 level.

 

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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