WTI Oil Rallied Towards The $88 Level

Key Insights

• WTI oil managed to break out of the recent trading range. 
• Natural gas pulled back after the strong rebound. 
• Gold continued to move higher as U.S. Dollar Index tested multi-week lows. 

WTI Oil Rallies Despite Rise In U.S. Inventories

WTI oil managed to get out of the recent trading range and moved towards the $88 level after the release of the EIA Weekly Petroleum Status Report. The report indicated that crude inventories increased by 2.6 million barrels from the previous week, compared to analyst consensus of 1.03 million barrels.

Total motor gasoline inventories declined by 1.5 million barrels, while distillate fuel inventories increased by 0.2 million barrels. Domestic oil production remained unchanged at 12 million bpd.

The increase in inventories was triggered by rising imports, which increased by 0.3 million bpd from the previous week and averaged 6.2 million bpd.

It looks that lower Treasury yields, weaker dollar and reports about a potential diesel shortage in the U.S. have provided enough support to oil markets, so traders ignored rising inventories.

In case WTI oil moves above the resistance at $88.50, it will head towards the next resistance at the $90 level. A successful test of this level will open the way to the test of the resistance at $91.30.

On the support side, a move below the 50 EMA at $87.70 will push WTI oil towards the next support at $86.20. If WTI oil declines below $86.20, it will head towards the support level at $85. A successful test of this level will open the way to the test of the support at $83.50.

Natural Gas Faced Resistance At $5.70

Natural gas pulled back towards the $5.50 level after facing strong resistance near $5.70.

Natural gas moved from $4.75 to $5.70 in just two days, so today’s pullback is not surprising as some traders decided to take profits off the table.

The weather forecast remains unfavorable for high natural gas consumption in the near term, and traders will wait for the EIA report, which will be released tomorrow.

Gold Tested Resistance At $1675

Gold settled above the $1660 level and tested the next resistance at $1675 as the U.S. dollar remained under strong pressure against a broad basket of currencies. The yield of 10-year Treasuries tested the psychologically important support level at 4.00%, providing additional support to gold and other precious metals.

Silver moved back above $19.50 and made an attempt to settle above $19.75. Platinum gained strong upside momentum and moved to multi-week highs at $965, while palladium rebounded towards the $1950 level.

Copper Rallied Above The $3.50 level

Weaker dollar and lower Treasury yields provided significant support to copper markets today. Copper moved above the 50 EMA near the $3.50 level and made an attempt to settle above $3.55.

It remains to be seen whether copper bulls will find enough catalysts to push copper into the $3.60 – $3.70 range, but it should be noted that today’s rally looks strong.

For a look at all of today’s economic events, check out our economic calendar.