Crude Oil May Rebound As Inventory Surges

WikiFX News (13 June) -This Tuesday (June 9th), Saudi announced it will stop cutting oil production beyond OPEC + agreement, which sent WTI from above US$39 down to US$ 37.07. However, with the surge of crude inventory, oil prices are expected to rebound further.

Although oil prices have rebounded more than 130% since they hit a low of US$17.27 in mid-April, news about reopening economy in Europe and the United States and the progress of vaccines still provide support for oil prices. API crude inventories announced early in the morning on Wednesday (10th) surprisingly surged 8.4 million barrels to 539.4 million barrels, far exceeding the expected decrease of 1.45 million barrels. After the release of the data, oil price fell rapidly by nearly 2% from US$38.8 to US$38.10, but finally closed above US$38.0 level.

For investors, it is important to focus on the regional support of US$37.0-37.50 in the short term. Considering that the overall upward trend of crude oil has not yet seen obvious signs of change, once oil price stabilizes again above US$37.0, it is expected to further rebound and challenge the US$41.0 or even US$45.0 level. However, if price falls further below $36.0, investors should watch for the possibility of a mid-term turnaround.

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