West Texas Intermediate (WTI), the benchmark for New York-traded crude oil prices, ended a wobbly day, as the market bulls thought twice on taking the (WTI) prices higher, after reaching $70.45, its highest since Oct 2018.
Meanwhile, U.S. inventory data showed a surge in petrol inventories due to weak fuel demand following the U.S. Memorial Day weekend, traditionally the beginning of the peak summer driving season.
According to Energy Information Administration data for the week that included the long Memorial Day holiday weekend, despite a 5-million-barrel draw in crude oil last week, stocks of petrol and other fuels rose sharply due to weak demand.
Analysts had projected one of the biggest ever summer demand periods for fuel in the U.S. as the economy reopens fully from a year of lockdowns and safety measures imposed after the March 2020 outbreak of the coronavirus pandemic.
Viewing the technical assessment, the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator has sharply fallen away from the overbought zone, while the Moving Average Convergence Divergence (MACD) holds to a positive signal.
In addition, the Average Directional Movement Index (ADX) trend indicator has lost its positive signal (bull-trend) and is now ranging.
Due to the Wednesday retreat, it now views a short-term pullback.
The immediate target is seen at $68.55-65, with $67.50-55 viewed beneath.
The $71.00-60 resistance level is expected to limit any further advancement in the short term.