WTI Jumps to 95 USD

Oil inventories figures

American Petroleum Institute data revealed that, in the week ending August 19, US oil stockpiles decreased by 5.6 million barrels, considerably above forecasts for a reduction of 450,000 barrels.

A 933,000 barrel decrease is anticipated to be revealed by official statistics, which are coming later on Wednesday. Over 7 million barrels were removed from US oil stocks in the week ending August 12.

Additionally, oil prices increased after OPEC’s comments that the group is considering a significant reduction in oil supply to counteract the recent decrease in oil prices.

On the other hand, the Iran Nuclear Deal has made some headway, and it is anticipated that once it is signed, various western sanctions on Tehran would be lifted. As a result, more than 1 million barrels of supplies will be made available to the market daily.

Attack on 200DMA

Oil is now marching toward the 200-day moving average (the purple line) at 96 USD, and it looks like that resistance will be claimed soon, likely changing the trend back to bullish. In that scenario, the next target is expected at the psychological level of 100 USD.

Alternatively, the intraday support seems to be near 92 USD; if not held, oil could decline back to the current cycle lows near 88 USD.

Moreover, the daily chart looks like a falling wedge pattern, a bullish reversal formation, possibly supporting the bullish cause and higher oil prices in the days ahead.