WTI Crude Oil Closes Lower Depite Larger-than-Expected API Draw

U.S. West Texas Intermediate crude oil futures finished lower on Tuesday despite the American Petroleum Institute (API) reporting a larger-than-expected draw this week for crude oil of 3.479 million barrels, compared to analyst predictions of a 1.167 million barrel draw.

On Tuesday, June WTI crude oil settled at $102.41, down $3.08 or -2.92%. The United States Oil Fund ETF (USO) closed at $76.67, down $1.71 or -2.18%.

The API also reported a draw in gasoline inventories of 4.50 million barrels for the week-ending April 29 after the previous week’s 3.91-million-barrrel draw.

Distillate stocks saw a draw in inventory of 4.547 million barrels for the week compared to last week’s 431,000- barrel increase.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum has been trending lower since the confirmation of last Friday’s closing price reversal top.

A trade through $107.99 will negate the chart pattern and shift momentum back to the upside. A move through the $109.20 main top will reaffirm the uptrend.

The main trend will change to down if $95.28 fails as support.

On the downside, support is a series of retracement levels at $102.24, $100.90 and $98.94. On the upside, the key resistance is the short-term retracement zone at $105.77 to $109.40.

Short-Term Outlook

We’re looking for the market to continue to trade in a range over the near-term as traders grapple with bearish demand news, fueled by the COVID-19 rated lockdowns in China. Bullish traders, on the other hand, are being driven by the hope of additional sanctions on Russia and a European embargo of its crude oil and oil products.

Later on Wednesday at 14:30 GMT, the U.S. Energy Information Administration (EIA) will release its latest inventories figures. Analysts and traders surveyed by the Wall Street Journal anticipate a 200,000 barrel drawdown and a 300,000 barrel drop in gasoline stockpiles.

Of the 11 analysts surveyed by WSJ, seven are predicting a decrease and four, an increase in crude oil inventories. They also expect distillates to record a decrease of up to 1.5 million barrels.