Crude oil continues to rise, and Brent is now trading above $71 for the first time since 2014. While API figures showed rising crude stocks, yesterday's EIA data suggested that crude oil inventories continue to fall. The data helped crude oil prices climb higher. Gasoline and distillate stocks were higher than expectations. The commodity has also been benefiting from general weakness in the US dollar. Crude oil tends to trade inversely to the dollar. Looking at technical indicators, crude oil is once again looking overbought on a daily chart. The commodity has been overbought on a weekly chart for some time now. Our short-term and medium-term trending indicators suggest a bullish trend.
WTI is currently trading above $66.10. Brent crude is currently above $70.80.
Looking at US crude oil stocks, the most recent EIA figures (January 24) showed falling crude oil stocks and rising gasoline inventories. Crude oil inventories were lower than estimates (-1.1m vs. -2.0m expected). Gasoline stocks were up (+3.1m vs. +2.5m expected) while distillate stocks (+0.6m vs. -1.5m expected) were also up. Looking at reactions in markets, crude oil prices rose following the EIA report.
As crude oil rebounds, we are upgrading the commodity to bullish in the medium-term. Looking at various technical indicators on the weekly chart, note that both Brent and WTI are looking overbought.