FXStreet (Mumbai) – Crude prices retreated on Thursday on concerns the recent surge in prices could have resulted in an increase in the production levels in the US.
WTI Crude futures hit an intraday low of USD 56.88/barrel ahead of the weekly inventory data release in the US. American Petroleum Institute (API) said on Wednesday that US crude oil inventories rose by 1.3 million barrels last week, following three weeks of withdrawals.
Investors are worried that the Energy Information Agency (EIA) data may also show a similar rise in the supply. However, the Reuters poll tells an opposite story. Analysts said in a Reuters poll on Wednesday that crude stocks in the United States probably fell by 900,000 barrels last week, dropping for a fourth straight week.
Meanwhile, part of a drop in crude prices is also due to a 0.225 rise seen in the USD index. Rise in the USD makes commodities expensive in non-USD terms.
WTI Crude Technical Levels
The futures currently trade at USD 56.86/barrel, with the immediate support seen at 50-DMA located at 56.81. A break below the same could see the prices drop to 56.05 (Apr. 28 low). On the other hand, a rise above 57.00 could push see the futures re-test 57.71 levels.
(Market News Provided by FXstreet)