Pre Open US - US Oil 20 July 2023

Despite the impact of a stronger US dollar and a bullish inventory report suggesting strong demand, the price of crude oil remained stable. The US dollar's recovery dampened investor sentiment, which was triggered by a bond rally due to lower-than-expected UK inflation.

On the other hand, the US Energy Information Administration reported a decline of 708,000 barrels in US crude stockpiles compared to the previous week. Notably, at the pricing point for WTI in Cushing, inventories fell by 2.9 million barrels, the largest drop since October 2021, as reported by the EIA. Additionally, the implied demand for all oil products also increased during the reported week.

Furthermore, there are noticeable signs of supply cuts from the Organization of the Petroleum Exporting Countries (OPEC), with Russia's crude shipments dropping to a six-month low in the four weeks leading up to July 16.

WTI crude oil is currently holding near the lower boundary of the existing bullish channel. Breaking through the 77-resistance level remains a challenge for WTI as it aims for the next target of 79. Moreover, on a weekly basis, the 200MA is acting as a resistance at the 77 mark.