WTI fails to surge despite US inventory drop

For the past week, the US Energy Information Administration (EIA) reports a drop in inventory. Imports of US crude oil fall to their lowest level since March 2021. WTI is trading at $73.203 per barrel at the time of writing. If it breaks above $75.00, it will start moving up again; if not, it will continue moving sideways.

The US benchmark for crude oil, WTI, dropped from weekly highs and hit $74.32 in the early New York session. Even if US inventories decreased, the price of WTI was not supported.

Although the US EIA reported a decline in inventory, WTI prices remained low. The rise in US shares is evidence of traders’ optimistic outlook. According to the US Energy Information Administration (EIA), inventories decreased last week as refineries increased production when the maintenance window closed. The US imported less crude oil than it had in March 2021.

Analyzing the data reveals that, contrary to forecasts of a gain of 92,000 barrels, crude oil stockpiles decreased by 7.5 million barrels to 473.7 million barrels in the week ending March 24.

Despite the oil shortfall, WTI was unable to profit as the dollar gained some ground. The value of the US Dollar (USD) against a basket of six different currencies is tracked by the US Dollar Index (DXY), which is up 0.31% at 102.745. Because of this, oil is more expensive for customers worldwide.

The Norwegian oil company DNO started halting production in Kurdistan’s fields following an arbitrage ruling.

Technically, WTI is stabilizing between the 20 and 50-day Exponential Moving Averages (EMAs), between $72.45-$74.85, after rebounding from trading close to the YTD lows. WTI needs to break $75.00 in order for the positive trend to continue, with upside dangers near the 100-day moving average. At $77.90. On the other hand, once WTI broke below $72.00 PB, it would retest the YTD lows at 64.41.