Yahoo Finance Oil Ticks Higher Amid Technical Support, Drop in Stockpiles
(Bloomberg) -- Oil edged higher as key technical levels provided a floor for losses while investors digested a mixed US inventories report.
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West Texas Intermediate rose 0.3% to settle above $79 a barrel after a monthlong slide that brought prices to the lowest since mid-March. The 100-day moving average stemmed crude’s losses, while the nine-day relative strength index indicated the selloff was overdone. Bolstering the technical rally was a report showed US stockpiles drew down by 1.36 million barrels last week.
“The next key area of resistance is between $80 to $81,” where the “psychologically important level converges with the 200-day moving average,” according to Fawad Razaqzada, a market analyst at City Index and Forex.com.
In recent days, key timespreads that serve as a gauge for supply and demand strengthened to as high as 50 cents after earlier having contracted as low as 26 cents earlier this week. The prompt spread has oscillated in a wide range as markets continue to search for direction.
Oil has been broadly losing steam since early last month as tensions ease in the Middle East. OPEC+ supply is once again in focus, with key member Russia pumping above target before the cartel meets next month. The group is widely expected to extend output curbs when producers convene June 1.
Separately, the Biden administration raised the price it’s willing to pay to refill America’s emergency oil reserves. The Energy Department will pay as much as $79.99 a barrel, the first time an explicit ceiling has been set.
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