Oil remains under pressure on US inventory buildup

Brent oil settled lower on Wednesday and continues to remain under pressure this Thursday morning in Asia after the data released in the US showed a rise in inventories.

At the time of writing, Brent oil was trading around 54.50/barrel. Prices clocked a high of $55.84 on Wednesday before falling to $54.29 levels.

The sellers made their presence felt after EIA indicated that domestic crude supplies rose by 2.26 million barrels in the week ended Dec. 16 as opposed to an expected drawdown of 2.3 million barrels.

Moreover, the EIA data was a bearish surprise given the API data released on Tuesday had shown a drawdown in inventories by 4.1 million barrels.

Brent Technical Levels

A break above $54.95 (5-DMA) would open doors for a revisit to $55.89 (Dec 20 high). A daily close above the same would signal bearish invalidation and open the door to $57.50 (post-OPEC high). On the other hand, a breakdown of support at $54.29 (previous day’s low) could yield a drop to $53.74 (Dec 16 low) and then to $53.18 (Dec 15 low).