Ahead of the EIA report, crude oil prices have recovered sharply after Tuesday’s decline. The drop in crude oil prices on Tuesday came after the API inventories report showed a surprise jump in US crude stocks. Tuesday’s 1.19% drop has been followed by a recovery of 1.32%.
The crude oil inventories report is being expected later today, with the markets predicting a slump of 6.5million barrels. This is a bit higher than last week’s surprise drop of 7.3million barrels.
Meanwhile, some normalcy is being restored in Texas’s oil production facilities, following last week’s cold snap that disrupted operations. However, crude oil output remains below capacity, with Reuters citing IIR Energy as saying that more than 7 million barrels per day worth of capacity remains offline as at the current week of writing this report.
Technical Levels to Watch
The active candle bounced off the high of the 17 February candle and has violated the 65.95 resistance, putting that price level at risk of a breakout. If the price candle closes with a 3% penetration to the upside of 65.95, the breakout is confirmed, and the price could attain the 66.81 price mark.
On the flip side, a decline in price that breaks down the ascending support trendline could allow bears to push prices towards 60.07, with 57.47 and 56.47 lining up as potential downside targets. This move has to take out the immediate price barrier at 64.26 to be actualized.
Crude Oil Price (Brent); Daily Chart