U.S. West Texas Intermediate crude oil futures are testing their high for the session on Tuesday after a private industry report showed a larger-than-expected draw down for crude oil, gasoline and distillates.
Prior to the release of the report at 20:30 GMT, a bullish tone had been present in the market as traders bet increased demand in the United States, Europe and China would offset any lost demand caused by the surging COVID-19 pandemic in India.
At 20:55 GMT, June WTI crude oil was trading $66.19, up $1.70 or +2.64%.
The American Petroleum Institute (API) reported late Tuesday that U.S. crude supplies fell by 7.7 million barrels for the week ended April 30. Ahead of the report, traders were pricing in at 3.9 million barrel draw.
The API also reported that gasoline stockpiles fell by 5.3 million barrels versus pre-report estimates of a 500,000 barrel drawdown.
Meanwhile, distillate inventories declined by nearly 3.5 million barrels. Traders were looking for a 1.6 million barrel drawdown.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier on Tuesday when buyers took out swing tops at $65.47 and $66.15. A new main bottom was formed at $62.91. A trade through this level will change the main trend to down.
The main range is $67.29 to $57.29. Its retracement zone at $63.47 to $62.29 is new support. Trading on the strong side of this zone puts the market in a bullish position.
The current upside momentum suggests the market has enough fire power behind it to fuel a test of the March 8 main top at $67.29 over the near-term.
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