Why Is WTI Oil Holding Steady Near $79? | Breaking Down the Latest Crude Inventory Data

The pi coin listingUS benchmark crude oil contract showed resilience Thursday as Western Texas Intermediate (WTI) hovered near $78.95 per barrel, demonstrating modest upward momentum following the latest Energy Information Administration (EIA) inventory report. Market participants digested multiple fundamental drivers including shifting supply dynamics and evolving geopolitical risks.

Fresh data from the EIA revealed a 1.4 million barrel drawdown in US crude stockpiles for the week ending May 3, marking a notable reversal from the previous week's 7.3 million barrel build. This inventory contraction aligned precisely with market expectations, suggesting stable demand conditions in the world's largest oil consumer. The drawdown provided underlying support for WTI prices as traders interpreted the figures as evidence of balanced physical markets.

Geopolitical developments introduced countervailing pressures on crude markets. Diplomatic efforts toward a potential Gaza ceasefire gained traction with high-level US-Israel discussions, potentially easing Middle East supply concerns that had previously buoyed prices. The evolving situation creates uncertainty about whether production or transportation disruptions might emerge from the region.

Monetary policy considerations added another layer of complexity to the oil price equation. Hawkish commentary from Federal Reserve officials, including Boston Fed President Susan Collins' remarks about prolonged elevated interest rates, strengthened the US dollar. A robust greenback typically creates headwinds for dollar-denominated commodities like crude oil by making them more expensive for holders of other currencies.

Market attention now turns to the upcoming June 1 OPEC+ ministerial meeting, where the producer alliance will review output policy. Russian Deputy Prime Minister Alexander Novak's recent comments downplaying immediate supply increases suggest the group may maintain current production restraints. This comes as global inventories remain relatively tight compared to historical averages.

Technical indicators show WTI trading below key moving averages, with the 20-day SMA at $81.79 and the 50-day SMA at $81.50, suggesting near-term resistance levels. Support appears around the 100-day SMA at $78.09, with the 200-day SMA at $79.77 potentially serving as a pivot point. Fibonacci retracement levels from recent price swings highlight $78.08 and $77.56 as potential inflection points for traders.

The convergence of these fundamental and technical factors creates a complex trading environment for WTI crude. While inventory draws suggest adequate demand, geopolitical developments and monetary policy considerations introduce volatility. Market participants will closely monitor upcoming economic data and OPEC+ signals for clearer directional cues in the weeks ahead.