Key Points
- WTI trades at $64.39 after rising 0.34%, with Brent holding above $69.
- API reports a 13.4M barrel surge in US crude stocks, vs Reuters estimate of +800K.
Crude oil prices steadied on Wednesday, with WTI last seen at $64.395, up $0.216 (0.34%), as traders balanced cautious optimism around US-Iran nuclear talks with the reality of rising inventory levels and renewed military posturing.
Brent futures rose 23 cents to $69.03, while WTI crude tracked the same gain, supported by hopes that recent diplomacy could ease tensions.
Iran’s Foreign Ministry confirmed that talks with the US were “serious enough” to continue, following a meeting in Oman last week.
However, markets turned cautious after US President Donald Trump hinted at deploying a second aircraft carrier to the Middle East should talks stall. The conflicting signals kept oil markets on edge.
Rising Inventories Cast a Shadow
The latest API report threw a curveball into an otherwise constructive outlook. US crude inventories reportedly surged by 13.4 million barrels in the week ending 6 February—far above the 800,000 barrel build forecasted by Reuters.
This discrepancy has raised eyebrows, especially ahead of the official EIA figures due Wednesday.
Meanwhile, distillate and gasoline stocks are expected to have declined by 1.3 million barrels and 400,000 barrels, respectively.
If confirmed, this could help offset some bearish sentiment stemming from the crude build, but the sheer size of the inventory jump remains a concern.
Technical Analysis
Crude Oil (CL-OIL) is currently trading at $64.395, up 0.216 (+0.34%), continuing its steady upward momentum from the recent low of $54.874 recorded in mid-December.
The recovery has been supported by a consistent climb along the moving averages, with price now sitting above all key indicators: MA5 ($63.91), MA10 ($64.14), MA20 ($62.35), and MA30 ($61.07). This alignment confirms a short-term bullish trend.
Since forming a double-bottom near the end of 2023, oil has rallied impressively, peaking at $66.465 before consolidating in a tight range between $63.80–$65.50.
Recent candles suggest the formation of a flag or pennant, typically a continuation pattern in technical analysis. Volume has cooled slightly but remains supportive, while the slope of the MA lines still points upward, indicating strong underlying momentum.
A breakout above $66.50 could open the way toward $67.41 and higher, while a failure to hold above $63.50 may trigger a pullback toward the $61.00–$62.00 support zone.
Overall, the bulls remain in control for now, though a sustained catalyst will be needed to break out of this consolidation range.
Market Implications
Oil remains caught between bullish technical momentum and bearish short-term supply pressures. Traders are now looking to the upcoming EIA inventory report for confirmation.
A confirmed build of over 10 million barrels would likely cap further upside for now, especially if military tensions cool temporarily.
On the other hand, if distillate and gasoline drawdowns are deeper than expected, it may cushion any bearish crude surprise.
