Weekly data from the U.S. Energy Information Administration (EIA) revealed a substantially larger-than-expected decline in the nation's commercial crude oil stocks. The EIA's Weekly Petroleum Status Report, released every Wednesday, is one of the most closely tracked data points in global energy markets, and this week's figures caught traders off guard. Crude inventories fell by 7.167 million barrels — roughly 5.6 times the expected draw of 1.272 million barrels, signaling a sharp tightening in available commercial supply held at refineries and storage terminals.

Gasoline stocks remained unchanged for the reporting week, compared to a projected decline of 0.1715 million barrels, suggesting demand at the pump was steady rather than accelerating. Distillate inventories — which include diesel fuel and heating oil — posted a build of 1.062 million barrels, notably above the consensus estimate of 0.146 million barrels, indicating softer near-term demand for transportation and industrial fuels even as crude supplies tightened.

The EIA figures contrasted sharply with a private survey from the American Petroleum Institute (API), an industry trade group whose weekly inventory report often serves as a preview of the government data. The API had anticipated a crude stock build of approximately 3.3 million barrels, a swing of more than 10 million barrels from the official government tally.

Crude oil prices surged following the release of the inventory report, amplified by escalating geopolitical tensions in the Middle East that have heightened concerns over potential supply disruptions. President Donald Trump vowed to "hit Iran hard," further intensifying geopolitical risk sentiment in a region that accounts for roughly one-third of global oil production. West Texas Intermediate (WTI) crude, the U.S. benchmark priced at the delivery hub of Cushing, Oklahoma, climbed to $85.20 per barrel — up nearly $6.00 on the day, or approximately 7.4%.

The rally marked a dramatic reversal from the prior session, when prices had dropped to $77.88. At that level, buyers emerged near a key swing support zone dating back to July 17, sparking the sharp move higher.

From a technical perspective, WTI was trading between two closely watched moving averages: the 200-hour moving average at $84.50 and the 100-hour moving average at $85.46, creating a near-term decision zone for market participants.

If sellers defend the 100-hour moving average, prices could rotate back toward support near $83.42. Conversely, a decisive break above that level could strengthen the bullish technical picture and open the path toward $88.00, with the 100-day moving average at $90.08 representing the next significant upside target.

Source: Investinglive