With the unexpected rise in EIA inventories joining global risk-off and the US Dollar strength, WTI plummeted during yesterday’s session. The Energy Information Administration reported 2.206 million barrels of increase in the US Crude oil inventory yesterday versus market consensus of -0.481 million barrels and +6.771 million barrels prior. Global investors are no longer cheering the US-Mexico deal as trade wars between the US and China are heating up again with both sides actively threatening each other. While political plays surrounding the trade tensions could keep entertaining global energy traders, the recent report early this morning about a “suspicious” attack on an oil tanker in the sea of Oman might trigger the benchmark’s pullback after the recent downturn.
After closing at $51 on Wednesday, marking the lowest recorded closing price since January 8th, crude prices are now performing a drawback as we move back above the $52.5 resistance with a strong volume and momentum. The recovery in oil prices looks like it's going to continue throughout the day as momentum picks up with an important key resistance level at $53.87 most likely to be tested.
Support: 51.83 / 50.87
Resistance: 52.5/ 53.87