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Crude Oil Prices Look to US Inventory Data for Direction

Crude Oil Prices Look to US Inventory Data for Direction

Ilya Spivak,
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CRUDE OIL TALKING POINTS:

  • Crude oil prices struggle for direction on conflicting supply/demand cues
  • API inventory flow data may be a catalyst for jittery, indecisive markets
  • Key resistance at $64/bbl, then the top at $68/bbl. Support near $57/bbl
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Crude oil prices are once again struggling for direction. Indeed, implied volatility readings are near their lowest in two months. A conflicted backdrop seems to have bedeviled investors. Spreading vaccination and fiscal largesse promise a revival in demand, but also the reopening of diminished shale production. At the same time, OPEC+ is phasing out output caps while the US and Iran try to re-engage.

All this seems to make for an indecisive and jittery market prone to event-driven volatility. With that in mind, the spotlight turns to API inventory flow data. The report is a precursor to official EIA figures released on the following day and is judged within its context. A smaller outflow than 3.2 million barrels may sting a bit. On the other hand, a larger draw may nudge prices upward.

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices’ sharp surge up and out of consolidation seemingly ran into a wall near the $64/bbl figure. A decisive moment defining recent gains as either trend-changing or corrective appears to be afoot. Breaking near-term resistance may expose the pivotal $68/bbl mark. Alternatively, slipping below 62.27 may put the range floor at 57.25 back in play.

Crude oil price chart

Crude oil price chart created using TradingView

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--- Written by Ilya Spivak, Head Strategist, APAC for DailyFX

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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