On the yesterday's afternoon, the global investors got to know the reports of the American Energy Information Administration (EIA) regarding crude oil inventories. After an increase in inventories by 5.836 million barrels last week, this time the consensus assumed a decline of 2.600 million barrels. The final reading, however, indicates a much larger drop in stocks of black gold.
The EIA report shows that after last week's increase by 5.836 million barrels in the week ending July 20, crude oil inventories fell by as much as 6.147 million barrels, which turned out to be a much better result than forecasts and the previous publication. Similarly with gasoline inventories, which also fell, but by 2.328 million barrels, despite lower downward forecasts (-0.713 million) and the previous reading of -3,165 million barrels.
A drop in crude oil stocks and/or refinery products means a drop in the supply of this raw material, which, according to the basic principle of the economy, should lead to increases in the valuation of black gold on the market.
Let's now take a look at the Crude Oil technical picture at the H4 time frame. Information about the drop in inventories led to the strengthening of oil prices, which was at new highs this week. Currently, the price tests the yesterday's highs, which are around $ 69.54. Breaking this resistance would open the way for a further rally towards $ 71.08. The positive, but not that strong momentum supports the short-term bullish outlook, nevertheless, for bulls to take over the control of the market, the price would have to break through the level of $ 72.13 first and head towards the swing highs at the level of $ 75.30.
