Crude Oil Price Analysis for March 16, 2017

Oil prices rebounded on Wednesday following an unexpected draw in crude oil inventories as reported by the Energy Information Administration. Crude oil prices rebounded from trend line support near 47.30, and are poised to test resistance near the 200-day moving average at 51.12.  The RSI (relative strength index) has moved higher with price action reflecting accelerating positive momentum.  Earlier in the session the RSI was in oversold territory but has climbed out and is now printing a reading of 31, which also reflects upside momentum.

Crude Inventories Unexpectedly Declined

The EIA also reported that crude oil inventories decreased by 0.2 million barrels from the previous week. Expectations were for a 3.5-million-barrel rise. Gasoline inventories decreased by 3.1 million barrels last week, while distillate fuel inventories decreased by 4.2 million barrels. In addition, propane inventories fell 0.8 million barrels last week. Total commercial petroleum inventories decreased by 7.8 million barrels last week.