The latest weekly inventory data from the U.S. Energy Information Administration (EIA) showed:

• Crude oil inventories fell 4.450 million barrels, versus an expected draw of 1.085 million.
• Gasoline inventories fell 1.173 million barrels, versus an expected decline of 1.850 million.
• Distillates rose 0.796 million barrels, against estimates calling for a drawdown of 1.275 million.

The private inventory data released late yesterday showed:

• Crude oil inventories -2.6 million
• Gasoline inventories +300,000
• Distillates -300,000

A larger-than-expected decline in crude oil inventories generally supports higher oil prices. Inventories are oil held in storage, and when those supplies fall more than anticipated, it can signal tighter supply or stronger demand. The EIA's weekly petroleum status report, released every Wednesday, is one of the most closely watched data points in the oil market because the United States is the world's largest oil consumer, making its stockpile levels a widely referenced gauge of supply-demand balance. That said, the inventory report is only one of many influences on price, and in the current environment geopolitical risk premiums tied to Middle Eastern tensions are playing an outsized role alongside fundamental data.

The divergence between the EIA figures and the private American Petroleum Institute (API) survey released a day earlier—crude drew 4.450 million barrels versus 2.6 million in the private data—also matters to traders, as surprises between the two reports often drive short-term price volatility.

Crude has rebounded from today's low of $88.97 to around $90.05. That still leaves the price down roughly $0.20 on the day, but the modest decline follows yesterday's sharp 5% gain.

From a technical perspective, yesterday's rally cleared two important levels that coincided at $86.53:

• The 100-day moving average: the average price over the past 100 trading days, which traders use to help assess the broader trend.
• The 38.2% retracement: a level marking where the price had recovered 38.2% of its decline from the April 7 high.

When two technical indicators meet at the same price, that area tends to attract more attention because orders from trend-followers and retracement-based traders cluster around it. For crude, $86.53 is now a key dividing line between buyers and sellers. Holding above it keeps the technical outlook more favorable for buyers, while slipping back below it would weaken that outlook and suggest the breakout is losing momentum.

On the upside, today's high of $92.29 came within $0.18 of the 50% retracement at $92.47. That midpoint marks a recovery of half the decline from the April 7 high. Buyers would need to push above—and stay above—that level to strengthen their case for further gains, with the next target being the July 23 high at $93.50.

For traders watching the broader move, the key technical boundaries are support at $86.53 and resistance at $92.47. Support is an area where buyers may step in; resistance is where sellers may slow or stop a rally.

That is a wide range, reflecting sharp swings as traders react to Middle Eastern developments. These levels serve as reference points, not guarantees: holding support favors buyers, while breaking resistance would give them another sign of progress. What to watch next is whether upcoming weekly EIA data confirms the trend of draws, and whether headlines from the Middle East keep risk premiums elevated—both factors that traders will weigh against these technical markers.

Source: ForexLive