Crude inventories fell 8.3M barrels vs 4.6M forecast; oil pulls back as Trump signals Iran deal could be signed soon. Technical levels for WTI, Brent, natural gas.
Alpha Score of 45 reflects weak overall profile with moderate momentum, weak value, weak quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
Oil prices slid off their session highs Wednesday after President Trump said a memorandum of understanding with Iran could be signed as soon as tomorrow. Traders are pricing in a reopening of the Strait of Hormuz and expect Iranian crude to flow back into the market, with the U.S. set to deliver sanction waivers.
Trump added that a military escalation in the Middle East could have triggered an international depression. He said he did not want to be like Herbert Hoover.
The EIA’s weekly report showed crude inventories fell by 8.3 million barrels, nearly double the 4.6 million barrel decline analysts had forecast. At current levels, inventories sit about 6% below the five-year average for this time of year. Gasoline stocks slipped 0.9 million barrels, close to the 1 million barrel draw expected. Distillate fuel inventories rose 1 million barrels.
U.S. crude imports dropped 754,000 barrels per day to average 5.1 million bpd. Over the past four weeks, imports averaged about 5.7 million bpd. The Strategic Petroleum Reserve fell from 349.2 million barrels to 340.3 million barrels as the government continued selling from reserves. Domestic production edged up from 13.799 million bpd to 13.806 million bpd.
WTI oil is testing the $76.50–$77.00 support zone. A clean break below $76.50 opens the next support in the $70.50–$71.00 range. The RSI sits in moderate territory, leaving room for further downside. On the upside, a move above $81.50 would be needed to build sustainable momentum.
Brent oil pulled back from its session high and is now testing $77.00–$77.50 support. A successful test of that zone targets $72.50–$73.00 next. Resistance sits at $81.50.
Natural gas retreated as traders took profits after the recent rebound. If gas settles back below $3.15, the next support is $3.00–$3.05. A break below $3.00 would open the door to further losses. On the upside, a move above $3.20–$3.25 is needed to regain momentum, with the next resistance at $3.40–$3.45.
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