Oil prices saw a sharp ascent overnight, extending their gains into Asian trading session today and marking their highest point in over a year. With technical indicators pointing to a potential acceleration, WTI oil is on the march towards 100 psychological level.
A factor propelling this surge is the pronounced drop in US crude stocks, amplifying concerns about tightening global supply in light of OPEC+ production cuts, spearheaded by Saudi Arabia. Yesterday’s data revealed that oil inventories dipped by -2.2m barrels last week, settling at 416.3m barrels.
Furthermore, the stockpiles at Cushing, Oklahoma, a crucial storage hub and the delivery point for US crude futures, saw a reduction of -943k barrels over the week, dropping to just under 22m barrels, lowest since July 2022. Significantly, these reserves at Cushing have been on decline for seven consecutive weeks. Many market participants view these current levels as bordering on the minimum required for operational functionality of the storage tanks.
Technically, WTI crude oil’s recent up trend resumed after brief consolidations and surged through 95 handle. There is sign of upside acceleration with break of the rising channel resistance. Near term outlook will stay bullish as long as 88.67 support holds. Next target is 50% retracement of 131.82 to 63.67 at 97.74. Decisive break there could pave the way through 100 psychological to 61.8% retracement at 105.78.
