WTI under pressure amid record high inventory levels

Oil futures on NYMEX entered the third day in negative territory, as investors’ sentiment remains plagued by a record build-up in US stockpiles, against the backdrop of rising US oil production.

Oil is seen consolidating the recent declines as traders remain on the back foot, following the release of this week’s crude reserves data from the US. Wednesday’s EIA report showed that the US crude inventories rose by 1.5 million barrels last week, less than forecast, but touching a record at 520.2 million barrels after eight straight weekly builds.

However, the black gold manages to hold $ 53 barrier amid higher OPEC output deal compliance, which offsets poor sentiment fuelled by concerns over rising US oil output levels.

WTI technical levels        

A break above $ 53.96/54 (10-DMA/ round figure/ daily pivot) could yield a test of $ 54.30 (intermittent tops), beyond which $ 55 could be tested. While a breach of support at $ 53 (key support) would expose the mid-Jan lows around $ 52.73/70.