Crude oil price has reacted sparingly to the higher-than-expected US oil inventories as demand optimism props up the prices. Late on Tuesday, API indicated that the weekly stockpiles rose by 4.319 million barrels compared to the expected 0.375 million barrels. Investors are now keen on whether EIA will confirm this trend in its Wednesday’s numbers. If it does, the inventories will have risen for two weeks in a row.
However, demand optimism has offset concerns on the higher oil inventories and rising COVID-19 cases. To begin with, OPEC+ is confident that the market is ready for increased supply. The alliance is set to continue with its decision to increase output by 2 million bpd over the next three months. Notably, the joint ministerial meeting that was scheduled for Wednesday has been postponed to early June.
The global benchmark for oil futures is down by 0.09% at $65.81. This is as the pace of recovery in the US exceeds that of other areas. However, steady economic recovery in Europe and other parts of the world has continued to offset concerns over the pandemic.
Crude Oil Price Technical Outlook
Crude oil price is consolidating after recording gains in the past two sessions. However, it has pulled back from Tuesday’s intraday high of 63.30 to trade at its current 62.86. On an hourly chart, the US benchmark for oil futures is above the 25 and 50-day exponential moving averages.
Furthermore, the formation of a rising wedge is a sign that crude oil price will rise further. It is likely to move higher to 63.56, where it will experience some resistance as the bulls strive to hit 64. On the flip side, a move outside of the rising wedge on the downside will have the bears retesting 62.
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