U.S. Strategic Petroleum Reserve Sinks to 298.7M Barrels, Multi-Decade Low

The Strait of Hormuz remained closed. There were no signs of a temporary deal between the U.S. and Iran, traders said. The crude build pointed to slack demand. Strait of Hormuz uncertainty kept a floor under prices.

WTI oil traded near $84 a barrel on Thursday, swinging between gains and losses. The immediate resistance sits at $84.00, traders said. A climb above that level would target the $86.00 to $86.50 range. Above that, the psychologically important $90 level comes into play. On the downside, support at $81.50 to $82.00 protects the 50-day moving average at $79.22. A break below the 50-day MA would open the path to the $77.50 to $78.00 support band.

Brent oil was mostly flat near $88.50. Traders were uncertain whether the U.S. and Iran would negotiate a deal or settle in for a months-long standoff. Brent faces resistance at $90.00, then $91.00 to $91.50, traders said. Support lies at $86.50 to $87.00, with the 50-day MA at $83.47 below that.

Natural gas continued its push higher, trading near $2.80 per MMBtu ahead of the EIA storage report due Thursday. The market expects a 31 Bcf injection for the week ended last Friday, traders said. Natural gas has been testing resistance at $2.75 to $2.80. A settlement above $2.80 would target the $3.00 to $3.05 zone. The relative strength index remains in moderate territory, leaving room for further upside if catalysts emerge. Support sits at $2.70, then $2.62. A previous analysis examined the 207K short positions facing the front-month contract.

The SPR drawdown stands out in this week's data, analysts said. At 298.7 million barrels, the reserve is at levels that predate the 1991 Gulf War. The current pace of depletion suggests the reserve could fall below 250 million barrels by the end of the year, a level that would leave the U.S. with less than 30 days of net import cover. The next weekly EIA report is due Wednesday.