Crude oil breaks higher today adding more than $2 to $54.10 in the best day for crude oil since January. Traders expectation is that a combination of Central bank easing both from Fed and ECB, along with a better sentiment on the US-China trade war leads to stronger demand for crude oil. The Energy Information Administration announced last week that the commercial crude oil inventories in the U.S. increased by 2.2 million barrels for the week ending June 7. The previous week API report, showed that crude oil stocks in the USA grew by 3.5 million barrels in the week ending May 31, the EIA announced that commercial crude oil inventories rose by 6.8 million barrels in the same period compared to economist’s’ estimate for a draw of 0.8 million barrels. Meanwhile, OPEC+ expected to roll over the oil supply cut of 1.2 million barrels per day beyond June.
Black gold is in bearish momentum as the previous week has breached all the major daily moving averages, but today with the sharp move higher managed to regain the key hourly moving averages. Crude oil immediate support stands at 50.50 the low from June 5th and if the price breaks below, the selloff will intensify and we might test the yearly low from early January at 46.90. On the upside first resistance stands at 54.70 the high from June 10th while next resistance stands at 55.10 where the 20 days moving averages cross. All in all it looks like another relief rally started and we have to watch our resistance levels.