With the latest shift in risk sentiment and decline in API inventories, WTI buyers re-emerged and took the prices up after hitting new lows. The 10-year US Treasury yield, the macro benchmark for risk tone, recovered from lowest since September 2017 to 2.270%. Adding to the upside sentiment could be a negative number of the US weekly crude oil stock. The oil inventory level, as conveyed by the American Petroleum Institute, for the week ended on May 24 slipped -5.265 million barrels versus previous addition of 2.4 million barrels. Furthermore, Geopolitical tension between the US and Iran haven’t yet calmed and continues to signal future energy supply crunch. Looking forward, Energy Information Administration’s official US crude stocks data for the week ended on May 24 will be the key for traders. The inventory number may slip by -0.80 million barrels compared to an earlier increase of 4.74 million barrels.
As expected, Crude oil prices headed lower during yesterday's session hitting a new low of $56.88 per barrel just before changing completely its direction amid a divergence that has occurred between the momentum and the price. The price is currently hovering just below the $59.28 resistance level as the momentum continues to edge up. We will keep focusing on the upside while watching the $59.99 resistance level.
Support: 58.02 / 56.69
Resistance: 59.28 / 59.99