WTI retraces losses above $50 post-EIA report
Crude oil prices gained traction in the first half of the NA session, helping the barrel of West Texas Intermediate retracing a portion of its daily losses. As of writing, the barrel of WTI was trading at $50.55, still losing 1.45%, or $0.75, on the day.
After closing the first three days of the week with gains, crude oil prices came under pressure in the early Asian session on Thursday after the American Petroleum Institute (API) announced that the U.S. crude oil stocks rose 3.097 million barrels at the end of last week, surpassing the market expectation of a 1.8 million barrels drawdown. On the other hand, in a report earlier today, the Energy Information Administration revised its forecasts of crude prices in the U.S. up to $50.57, however, also announced that it expected the production in to increase 0.8% to 9.92 million barrels a day.
Commenting on that report, Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt, “the tone of the IEA report was bearish because it suggested that demand for OPEC crude next year would not be sufficient to absorb all the available supplies,” told Reuters.
After easing to a daily low at $50.23, the barrel of WTI gained traction and staged a modest recovery as the weekly crude oil stock report released by the EIA showed a 2.8 million barrels drop.
The barrel of WTI faces the first technical support at $50 (psychological level) ahead of $49.10 (50-DMA) and $48.10 (Sep. 13 low). On the upside, resistances align at $51.50 (daily high), $52 (psychological level) and $52.85 (Sep. 28 high).