Crude Oil briefly finds fresh high before backsliding into the red on Friday

• WTI falls back below $81.00 as bullish momentum gets snipped.
• US Crude Oil initially rallied on Friday, but quickly tumbled into familiar levels.
• The EIA noted that US Crude Oil production hit fresh highs in April.

West Texas Intermediate (WTI) rallied into a fresh eight-week high on Friday as broad-market risk appetite stepped higher, but investor sentiment moderated during the US market session, dragging Crude Oil prices into a fresh low for the day. The Energy Information Administration (EIA) noted that despite a slight increase in overall fossil fuel demand, gasoline demand declined further and the US continues to see near-term highs in overall production output. 

Ongoing market hopes for a summertime increase in general Crude Oil demand continue to run aground on a rocky reality as consumer demand for fossil fuels consistently undershoots market forecasts. 

According to the EIA, an uptick in US Crude Oil and petroleum products rose to its highest level since December, but increases in US Crude Oil production, which also rose to December peaks at 13.25 million bpd in April, is more than enough to offset supply draws. The EIA also noted a general decline in consumer-level gasoline demand, which fell to 8.83 million bpd in April, the lowest figure since February.

WTI technical outlook

WTI US Crude Oil snapped into a fresh eight-week high of $82.31 on Friday before backsliding into downside chart territory for the trading week’s final session, wrapping up the week battling the $81.00 handle. Near-term chart churn has WTI roiling under firm downside pressure from a supply zone above $81.50 per barrel.

Despite frothy intraday price action, daily candlesticks remain trapped in near-term consolidation as WTI struggles to hold onto bullish territory north of the 200-day Exponential Moving Average (EMA) at $79.00.

WTI hourly chart

WTI daily chart