Crude Oil Prices Hold Gains As Stockpiles Fall, OPEC Lifts Demand Outlook

Looking ahead, traders are eyeing US headline and core inflation figures for clues about price levels and their implications on Fed monetary policy. The headline rate is forecasted to hit a ten-year high of 3.6% YoY. A higher-than-expected actual reading may lead the US Dollar to strengthen and probably weigh on commodity prices.

The Energy Information Administration (EIA) will report weekly inventories data later today. Markets anticipate a 2.10-million-barrel draw in stockpiles for the week ending May 7th. A larger-than-expected fall may serve to underpin crude oil prices, whereas a smaller one or rise would likely do the reverse (chart below).

Crude Oil Prices Hold Gains as Stockpiles Fall, OPEC Lifts Demand Outlook

Source: Bloomberg, DailyFX

Technically, WTI is challenging a key resistance level at 66.50 – the 200% Fibonacci extension. A successful attempt would likely intensify near-term buying pressure and open the door for further upside potential. A failed attempt, however, may result in a “Double Top” chart pattern that is inherently bearish in nature. The bearish scenario may lead to a technical pullback towards 62.19 – the 161.8% Fibonacci extension. Prices remain in an “Ascending Channel”, suggesting that the overall trend remains bullish-biased.

WTI Crude Oil Price – Daily Chart

Crude Oil Prices Hold Gains as Stockpiles Fall, OPEC Lifts Demand Outlook

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