Crude Oil Prices Look to US Inventory Data for Diretion

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CRUDE OIL TALKING POINTS:

  • Crude oil prices struggle for direction on conflicting supply/demand cues
  • API inventory flow data may be a catalyst for jittery, indecisive markets
  • Key resistance at $64/bbl, then the top at $68/bbl. Support near $57/bbl

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Crude oil prices are once again struggling for direction. Indeed, implied volatility readings are near their lowest in two months. A conflicted backdrop seems to have bedeviled investors. Spreading vaccination and fiscal largesse promise a revival in demand, but also the reopening of diminished shale production. At the same time, OPEC+ is phasing out output caps while the US and Iran try to re-engage.

All this seems to make for an indecisive and jittery market prone to event-driven volatility. With that in mind, the spotlight turns to API inventory flow data. The report is a precursor to official EIA figures released on the following day and is judged within its context. A smaller outflow than 3.2 million barrels may sting a bit. On the other hand, a larger draw may nudge prices upward.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices’ sharp surge up and out of consolidation seemingly ran into a wall near the $64/bbl figure. A decisive moment defining recent gains as either trend-changing or corrective appears to be afoot. Breaking near-term resistance may expose the pivotal $68/bbl mark. Alternatively, slipping below 62.27 may put the range floor at 57.25 back in play.

Crude Oil Prices Look to US Inventory Data for Diretion

Crude oil price chart created using TradingView

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— Written by Ilya Spivak, Head Strategist, APAC for DailyFX

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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