Crude Oil slips back on Tuesday, WTI falls to $80.50 after API reports another surprise buildup

• WTI falls back once more from $81.50 as near-term chart churn continues.
• API weekly Crude Oil counts reported another unexpected increase in reserves.
• Middle East tensions keep Crude Oil risk bid elevated, but weakness persists.

West Texas Intermediate (WTI) US Crude Oil eased back on Tuesday, slipping over a dollar per barrel from $81.50 to test below $80.50 as bullish Crude Oil sentiment continues to sour with hopes for a summertime drawdown dwindling and a surprise buildup in US Crude Oil stocks hampering upside potential in energy markets.

The American Petroleum Institute (API) reported a week-on-week buildup of Weekly Crude Oil Stocks for the week ended June 21, chalking in a 900K barrel buildup compared to the expected drawdown of 3 million barrels, adding to the previous week’s buildup of 2.263 million barrels. US Gasoline inventories also rose, climbing 3.843 million barrels as domestic demand struggles to sop up output from refined producers.

Broad-market hopes for a firm drag on Crude Oil stocks are dwindling as inventory counts climb. Barrel traders, who have been propping up Crude Oil prices on fears of the Israel-Palestinian Hamas conflict might spill over into neighboring countries, have yet to see any actual disruptions in Crude Oil production.

Adding onto this, the Organization of the Petroleum Exporting Countries (OPEC) and its extended network of non-member ally states, OPEC+, are set to begin phasing out voluntary production cuts meant to bolster global Crude Oil prices. OPEC+’s gradual phasing out of production caps could see an additional 2.2 million bpd pour into global Crude Oil supplies as OPEC+ member states grow weary of propping up global energy prices at the expense of their government budgets, which rely on Crude Oil sales to balance the books.

WTI technical outlook

Near-term price action has halted a bullish advance, keeping WTI US Crude Oil prices pinned on the low side of a supply zone above $81.50. Intraday bidding is easing back to the 200-hour Exponential Moving Average (EMA) at the $80.00 handle, and an extended backslide could see barrel bids tumble further into mid-June’s consolidation range below $78.50.

Daily candlesticks have largely churned in place since finishing a 12.65% bottom-to-top rally sparked after early June’s swing low to $72.45, but a lack of bullish momentum beyond the 200-day EMA at $78.90 leaves price action poised for a bearish turnaround.

WTI hourly chart

WTI daily chart