Technical Analysis:
US OIL gave good structure shift to the upside and price is heading towards the fvg above from there we can expect a retracement back towards lower levels and if we get the opportunity to capture the retracement we can go for that too. Price is trading around $79 and can head towards 80-81 range and then fall below.
Fundamentals:
Crude oil prices climbed after the U.S. Energy Information Administration's weekly report showed a draw in U.S. crude inventories, signaling a tight physical market, ANZ Bank said in a Thursday note.
The EIA reported that crude stocks fell 1.36 million barrels last week, against expectations of another build in inventories. The surprise drawdown helped reverse losses earlier in the session, the bank noted.
Brent crude gained 0.8% to US$84.23 per barrel and West Texas Intermediate (WTI) crude rose 0.9% to US$79.67/b at last look early Thursday. The market shrugged off builds in gasoline and distillate as refiners ramp up for the upcoming driving season, ANZ Bank said.
Meanwhile, a stronger US dollar has been weighing on investor appetite and hawkish commentary from US Federal Reserve officials is raising doubts about a rate cut, the bank said.
However, prices may find some support from the U.S. government working to rebuild the country's Strategic Petroleum Reserve, ANZ Bank noted. The Biden administration reportedly raised the price it is willing to pay for oil to US$79.99/b, up from an informal cap of US$79/b.
With WTI crude currently trading below that level, buying from the US may tighten the market, the bank said.
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