US crude oil inventories fall more than forecast, price rebounds from low

The EIA's weekly inventory report revealed the following figures:

• Crude stockpiles dropped by 4.450 million barrels, compared to an expected draw of 1.085 million.
• Gasoline supplies decreased by 1.173 million barrels, against a forecast draw of 1.850 million.
• Distillate inventories increased by 0.796 million barrels, while analysts had predicted a decline of 1.275 million.

The privately compiled inventory data from the previous evening showed:

• crude oil holdings fell by 2.6 million barrels
• gasoline stocks rose by 0.3 million barrels
• distillate supplies declined by 0.3 million barrels.

When crude inventories drop by more than forecast, it tends to support higher oil prices. The reason: inventories represent stored oil. A bigger-than-expected draw may signal tighter supply or stronger demand. Still, the weekly data is just one factor among many influencing prices.

Crude oil has recovered from its intraday low of $88.97, trading near $90.05. That leaves it roughly $0.20 lower on the session, a modest decline following Tuesday's sharp 5% gain.

Technically, the rally on Tuesday broke through two key levels that converged at $86.53:

• The 100-day moving average: the average price over the past 100 trading sessions, used by traders to assess the broader trend.
• The 38.2% retracement: a level where the price recovered 38.2% of the decline from the April 7 high.

When two technical indicators converge at the same price, that area draws more attention. For crude, $86.53 now acts as a critical dividing line between buyers and sellers. Holding above it keeps the technical outlook favorable for buyers. Falling back below would weaken that outlook and suggest the breakout is losing momentum.

On the upside, the session high of $92.29 came within $0.18 of the 50% retracement at $92.47. That midpoint represents a recovery of half the decline from the April 7 high. Buyers need to push above—and stay above—that level to strengthen their case for further gains. The next target would then be the July 23 high at $93.50.

For traders monitoring the broader move, the key technical boundaries are support at $86.53 and resistance at $92.47. Support is where buyers may step in; resistance is where sellers may slow or stop a rally.

That is a wide range, reflecting the sharp swings as traders react to Middle Eastern developments. These levels provide reference points, not guarantees: holding support favors the buyers, while breaking resistance would give them another bullish signal.