Will WTI crude resume its uptrend following yesterday's gains? Let's analyze.
Crude oil gained 2. 78% on Tuesday as markets reacted to lower-than-expected CPI data and political developments. However, prices remain below the key medium- to long-term resistance level of $65–66. Today, crude oil is down 0. 8%, as markets appear to be pausing following the recent rally.
For oil markets specifically, these developments are worth monitoring:
- OPEC has trimmed its forecast for growth in oil supply from the United States and other producers outside the OPEC+ group this year, now expecting supply to rise by about 800,000 barrels per day in 2025, down from last month's forecast of 900,000 bpd.
- API data showed U. S. crude stocks rose by 4. 3 million barrels in the week ended May 9, while gasoline inventories fell by 1. 4 million barrels and distillate stocks dropped by 3. 7 million barrels.
- The US-China trade tensions have eased with the announcement of a trade deal, which has stabilized market sentiment.
Conclusion
Crude oil is showing some consolidation following yesterday's gains, with prices remaining below mid-April highs. While the market reacted positively to lower-than-expected inflation data, today's retreat suggests caution among traders ahead of official inventory data from the EIA expected at 10:30 a. m.
For now, my short-term outlook is neutral.
No positions are currently justified from a risk/reward perspective.
Here’s the breakdown:
- The market still appears to be in a consolidation phase rather than establishing a new sustained uptrend.
- The large crude inventory build reported by API is offsetting some of the positive sentiment.
- The key resistance zone around $65-66 remains an important technical barrier that may limit further gains
