Oil extends recovery as inventories fall

FXStreet (Córdoba) – West Texas Intermediate crude oil futures staged a nice comeback this Wednesday, after the US EIA reported that crude inventories fell, down by 5.9 million barrels in the week ending December 18. The American Petroleum Institute also reported a drop late Tuesday, informing a decrease of 3.6 million barrels, both way beyond market’s expectations.

West Texas Intermediate crude for February delivery rose or 3.8% to settle at $37.50 a barrel.

WTI technical view

“The daily chart shows that the price stalled right around a strongly bearish 20 SMA, while the technical indicators maintain strong upward sloped within negative territory, and are nearing an upward cross of their mid-lines”, said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, the 4 hours chart shows that the price is above a bullish 20 SMA, but stalled right below a bearish 100 SMA, while the technical indicators are retreating from overbought territory, supporting a downward corrective movement for the next few hours”.

Support levels: 37.10 36.60 35.70. Resistance levels: 37.80 38.50 39.20.

West Texas Intermediate crude oil futures staged a nice comeback this Wednesday, after the US EIA reported that crude inventories fell, down by 5.9 million barrels in the week ending December 18. The American Petroleum Institute also reported a drop late Tuesday, informing a decrease of 3.6 million barrels, both way beyond market’s expectations.

(Market News Provided by FXstreet)