Oil Holds Steady As Eia Reports Drawdown

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Oil Holds Steady As Eia Reports Drawdown

Oil Holds Steady Above $80 As Eia Reports Drawdown

According to the latest EIA report, the stockpiles of crude oil in the USA have declined once again. The data showed that the reserves had gone down by 1.519 million barrels during the week.

Now that the USA has fewer oil reserves, it means more buying will be done to compensate for the decline in the reserves. As a result, the WTI has turned bullish and has already crossed the $80 handle.

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Meanwhile, the USD appears to be in a little bit of trouble after the Fed and the BoJ announcement. Additionally, the release of the dot plot also doesn't sit well with the greenback which also supports a higher WTI.

For now, the WTI is trading near $80.90 / barrel, while Brent oil is trading near $85.19 for now. Both of these oil benchmarks are positive in the hopes of an era where demand will go up and interest rates will go down.

Even if we keep the central bank announcements aside for a moment, a mix of the drawdowns and the supply issues are also positive for the oil prices.

After all, these are the circumstances that were forecasted by the OPEC+ as well. In the USA, it appears that the USA is unable to fill the gap left by the cuts from OPEC+ members. When we consider the fact that even Russia is having a hard time keeping up with demand, it makes sense for the oil prices to go higher.

Looking ahead, the oil prices are now looking towards the $86.00 handle with eyes on the $86.90 and then the $87.00 handle. After these 2 levels, the next stop for the oil bulls will be $93.98 - $94.00.

If we look toward the downside, several support levels are present between $80.60 - $80.00. At the very least, the 200 SMA near the $78.33 can also act as a net if the oil prices decline near these levels.

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