Oil bottoms out after three consecutive sessions of losses

• Oil sinks more than 5.5% in just three trading days. 
• WTI Oil tries to recover back to $80 with 
• The US Dollar Index holds ground above 105.50 despite bearish forces from Fed’s decision. 

Oil prices recovered a touch on Thursday after athe three-day nosedive move triggered by a string of headlines which took the wind out of the Oil price. More diplomatic efforts are being pushed forward in Gaza to broker a ceasefire deal, which would ease tensions in the region. Next to that, the US Energy Information Administration (EIA) reported on Wednesday one of the biggest Crude sStockpile build ups seen in a long time. 

The US Dollar Index (DXY) sees pressure building on an intermediate level at 105.50, after several attempts over the past two weeks to break below it. The level still holds though, ahead of the US Jobs report for May, to be released on Friday. The overnight Federal Reserve rate decision did not hold any big changes and Fed Chairman Jerome Powell confirmed that the Fed wants to see inflation first coming down further before considering a cut. 

Crude Oil (WTI) trades at $79.26 and Brent Crude at $83.95 at the time of writing.

Oil news and market movers: Restocking

• The US EIA reported on Wednesday an increase in Oil stocks of 7.265 million barrels. This surprise and large buildup was against market expectations of a 2.3 million decline and followed a 6.37 million decrease a week ago.  
• India is filling up its gap of Venezuelan oil with Iraqi Ooil after US sanctions forbid India from importing, Bloomberg reports. 
• Citi’s commodity analyst Eric Lee said on Wednesday in a note that OPEC+ is expected to maintain its supply curbs for the second half of this year.
• Shell’s CFO, Sinead Gorman said on a conference call that the second half of this year will be tight in terms of supply, with OPEC+ policy being key. 

Oil Technical Analysis: Cooling down in an uptrend

Oil prices might be cooling down a touch, but the overall long-term uptrend is still very much in play, with the green ascending trend line from December last year still valid. The recent decline could be a welcomed entry level for traders that missed the boat earlier and did not want to head in above $80. Depending on a ceasefire deal and more stockpile buildup, some additional pressure could come for Oil before soaring back to $84.

After its attempt to edge higher, the recent decline makes $83.34 and the $90 handle again the first key levels on the upside. One small barrier in the way is $89.64, the peak from October 20. In case of further escalating tensions, expect even September’s peak at $94 to become a possibility. 

On the downside, the 100-day Simple Moving Average (SMA) near $77.88 is the first line of defence before the actual uptrend ascending trend line gets tested. Expect that to be around $77.00 for this week. A break of that trend line could result in a drop to $74.36.

US WTI Crude Oil: Daily Chart