Crude oil WTI sub $64 ahead of EIA inventories on Wednesday

• Russia’s oil output surged in March to an 11-month high.
• WTI rebounded slightly on Tuesday after Monday’s selloff.

Crude oil WTI is trading at around $63.55 up 1.15% on Tuesday as it partially recovered some losses seen on Monday. The market is shifting its focus the EIA Crude Oil stockpiles report on Wednesday.

Oil sold-off on Monday as Russia’s oil output surged in March to an 11-month high of 10.97 million barrels per day, which was a little above a limit agreed under a global supply pact with OPEC (Organization of the Petroleum Exporting Countries), according to Russian energy ministry data.

However, Russia had to increase production to match weather-related demand, according to analysts. “Russia reached the production cuts compliance (with the OPEC deal) of 93.4 percent. The fluctuations of the liquid hydrocarbons in March were due to a high demand for gas and seasonality on the domestic market. Russia is fully committed to reaching the balance on the oil market” said Energy Minister Alexander Novak in a statement. 

The recent move from China, slapping trade tariffs on 128 US goods does not include oil.  

Meanwhile, Musk tweeted that “Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt.” which to a certain extent adds to the bull case for oil. 

The API Crude Oil Stock decreased at -3.28 million barrels while last week it was at 5.321 million. Which is seen as somwhat bullish.

Crude oil WTI weekly chart

The bears have taken the lead right off the bat this week and are driving the market down towards the ascending bull trendline. 

Crude oil WTI daily chart

Resistance is seen at $63.72 swing low and $64.53 supply level. A break above $64.53 could lead to an acceleration to the $66 handle. On the flip side, support is seen at $62.80 low made on Monday and at $62.30 demand level, if broken the $60 handle might be next. The short-term momentum remains bearish as long as we stay below $64.53.