Oil prices have turned bullish again today, jumping $1.50 higher as EIA crude Oil inventories showed a considerable drawdown for last week. However, markets were prepared for such a reading, after yesterday’s massive draw in the privatye API figures, which showed a 5.5 million barrels decline.

WTI Crude Oil Daily Chart – Buyers Testing the 200 SMA Again

The current outlook for crude Oil is bullish today, but the larger picture looks neutral, influenced by several factors. Such factors include softer US data, failed attempts to clearly break above $80 and hold, ongoing tensions in the Red Sea, and the decision by OPEC+ to extend voluntary output cutbacks into the second quarter without resulting in a significant price increase.

On the demand side, recent economic data has consistently fallen below expectations, dampening market sentiment and reducing expectations for Oil demand growth. The daily chart shows that WTI Oil failed to break above the key resistance level at $80 per barrel following the soft US data last week. As a result, the price fell to around $76.70, where it found support at the 50-period Simple Moving Average (SMA).

Buyers stepped in at this level, considering it as an opportunity to position for a potential rally towards the $80 resistance level with a favorable risk-to-reward setup. Today’s EIA inventory report improved the sentiment for crude Oil further, with risk sentiment also being mildly positive as the slight rally in European stock markets shows.

The Weekly EIA Crude Oil Inventory Report

• Crude oil inventories showed a drawdown of -1.536 million barrels, contrary to the expectation of a build of 1.338 million barrels.
• Distillate inventories witnessed a build of 0.888 million barrels, differing from the forecasted drawdown of -0.150 million barrels.
• Gasoline inventories experienced a drawdown of -5.662 million barrels, surpassing the estimated drawdown of -1.900 million barrels.
• Cushing inventories decreased by -0.220 million barrels, in contrast to the previous week’s build-up of 0.701 million barrels.

Crude oil is trading at $79.60s marginally higher than the pre-release levels

API Private Crude Oil Inventories From Yesterday

US WTI Crude Oil Live Chart