Crude oil price made it a winning streak of 8 days, as traders continued to assume risky sentiment that pushed demand for risky commodities this Wednesday. Crude oil price on the Brent crude benchmark also found support from a surprising drawdown in crude oil inventories.
The latest EIA crude oil inventories report showed that US crude oil stocks fell by 6.6 million barrels in the week ended February 5. This figure was much lower than the expected drawdown of 900,000 barrels. It also surpassed last week’s reduction of 1 million barrels.
The rollout of coronavirus vaccines seems to have picked up pace without hitch, allowing risky sentiment to thrive. Furthermore, a decline in the US Dollar as a result of the expectations of the passage of the $1.9 trillion stimulus package.
Technical Outlook for Brent Crude
Crude oil price on the Brent crude benchmark is gradually approaching a pitstop at 62.21, having completed the double penetration close above the 60.07 resistance level. If the price breaks above the 62.21 resistance, the pathway towards 64.26 will be opened.
On the other hand, a lack of follow-through buying could allow for a dip and retest of the 60.07 price level, which now functions as a support. A breakdown of this price level brings in new targets at 57.47 and possibly 56.47, in that order.
Price action continues to be determined by sentiment created by the effectiveness of the rollouts of the coronavirus vaccines.
Crude Oil Price; Daily Chart