Oil has been trading higher in the morning and early afternoon, gaining as much as 1.5% at one point. However, situation took a U-turn following release of US Department of Energy report on US oil inventories, which showed large unexpected build in oil inventories as well as bigger than expected increases in gasoline and distillate inventories. Oil prices moved sharply lower in the aftermath of the report and erased daily gains.
Taking a look at WTI chart (OIL.WTI) at H1 interval, we can see that declines were halted by the 50-hour moving average (green line), after which price recovered back to $78.30 support zone. This zone is marked not only with previous price reaction but also with the lower limit of local market geometry. Defending this area would, in theory, mean that the uptrend has been maintained, with recent local highs in $79.30 area being the potential short-term target for buyers.
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OIL.WTI at H1 interval. Source: xStation5
