Oil prices remain near the highs, EIA’s inventory data up next

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Plenty of items yesterday on the fundamental front, including inventory data out of API (American Petroleum Institute) that showed an increase of 5.2 million barrels for Oil - US Crude, though gasoline was down by 4.6 million and distillate dropped by 2.7 million barrels.

EIA’s (Energy information Administration) more encompassing estimates are up next projected to show a smaller 1.1 million increase in US crude oil inventories, though a larger number that's closer to API tends to come as a smaller surprise for oil traders already braced (its monthly report expects US production to drop this year, rebound next).

OPEC's monthly report showed it reduced forecasts for oil demand growth for this year from 5.96 million to 5.82 million though was driven by data in the first three quarters of the year and saying natural gas prices at record highs could result in an industrial switch to oil that could aid oil demand growth, maintaining its forecasts for 4.2 million bpd growth for next year, and where inventories for OECD dropped 19.5 million barrels to levels below the five-year average.

At an event, the Russian president said $100 a barrel is still possible even with OPEC+ stability attempts.

Oil WTI technical analysis, overview, strategies, and levels

From a technical standpoint, its main technical indicators continue to flash green with prices near the upper ends of the Bollinger band, within its bull trend channel, above all its main moving averages, with a positive DMI (Directional Movement Index with its DI+ above its DI- by a decent margin), an ADX (Average Directional Movement Index) that’s just in trending territory, and its RSI (Relative Strength Index) only just in overbought territory (by at least one historical price set of calculations).

That usually translates into an ongoing stalling bull trend technical overview, though given the source of movement isn’t from this energy commodity specifically, and it has kept the overview volatile, even if yesterday contrarian reversals won out as its previous first support level managed to hold.

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IG client* and CoT** sentiment for Oil WTI

When it comes to sentiment, there’s been little change amongst retail traders who continue to hold a majority sell bias that’s a notch lower than yesterday morning’s 63% reading, expecting, and awaiting a pullback in price to unwind those shorts in profit.

That stands in clear contrast to Commitment of Traders report speculators who have remained consistently in majority buy territory, and in the latest report rising from heavy long into extreme buy territory at 78%.

Oil WTI chart with retail and institutional sentiment

^{*The percentage of IG client accounts with positions in this market that are currently long or short. Calculated to the nearest 1%, as of today morning 8am for the outer circle. Inner circle is from the previous trading day.}

^{**CoT sentiment taken from the CFTC’s Commitment of Traders report, outer circle is latest report released on Friday with the positions as of last Tuesday, inner circle from the report prior.}