Crude Oil prices tested higher on Wednesday, reaching fresh peaks despite subdued market flows and thin volatility due to US markets being closed for the Juneteenth holiday. West Texas Intermediate (WTI) US Crude Oil hit $81.00 per barrel, marking a seven-week high and continuing a second straight week of gains. However, concerns loom over an extended uptick in US Crude Oil supplies, which could dampen the current mood in the energy market.
The American Petroleum Institute (API) reported a week-on-week increase in US Weekly Crude Oil Stocks, adding 2.264 million barrels to counts. This increase, coupled with ongoing high US production levels, is putting pressure on current demand levels. Additionally, OPEC and its allies are set to end voluntary production cuts later in the year, potentially leading to a further oversupply of Crude Oil in the market.
Despite disappointing demand figures from China, barrel traders are hopeful for an expected uptick in summertime energy demand to counter the current oversupply situation. The Energy Information Administration (EIA) will release its weekly barrel counts on Thursday, with traders anticipating a drawdown of -2.0 million barrels after the previous week’s buildup.
On a technical note, WTI Crude Oil has shown signs of a temporary halt in its recovery, with the possibility of a pullback below the 200-day Exponential Moving Average (EMA) at $78.84. This could lead to a downward trend, pushing bids back below a descending trendline drawn from previous peak bids.
Overall, the energy market remains cautiously optimistic but faces challenges from increasing supplies and potential production cuts from major oil-producing nations. Investors will be closely watching for any developments that could impact Crude Oil prices in the coming days.
Source: https://www.fxstreet.com/news/crude-oil-tests-higher-ground-on-quiet-wednesday-wti-touches-8100-202406192142
