Oil falls more than 3% on unexpected US inventory rise

FXStreet (Córdoba) – Oil prices accelerated their declines on Wednesday weighed by an unexpected increase of US stockpiles and Saudi Arabia reiterated its commitment in keeping oil production high.

The API inventories report released late Tuesday showed a surprisingly large build of 2.9 million barrels when a small decline was expected, while the EIA reported that crude oil stockpiles rose by 2.6 million last week, well above the 2.5 million barrels decline expected.

Light, sweet crude for February delivery fell 3.4%, to settle at $36.60 a barrel on the New York Mercantile Exchange. Oil prices have lost around 30% this year as the global supply glut is rising.

WTI technical view

“The technical picture is clearly bearish, as in the daily chart the price is back below a bearish 20 SMA, whilst the technical indicators turned south, now crossing their mid-lines into negative territory”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price continues developing below its 20 SMA while the technical indicators show no clear directional strength, but remain in bearish territory, maintaining the risk towards the downside”.

Support levels: 36.20 35.50 34.80. Resistance levels: 37.50 38.30 39.10.

Oil prices accelerated their declines on Wednesday weighed by an unexpected increase of US stockpiles and Saudi Arabia reiterated its commitment in keeping oil production high.

(Market News Provided by FXstreet)