Crude oil tries to shake off the supply increase, WTI recovers the $74 level

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U.S. West Texas Intermediate (WTI) crude oil is rising on Wednesday as energy markets try to ignore another increase in U.S. crude oil inventories. The Organization of the Petroleum Exporting Countries (OPEC) and its expanded group of non-member allied states, OPEC+, warned this week that the global oil cartel is ready to gradually eliminate voluntary production cuts, as crude oil producers become frustrated with OPEC’s inability to generate broad market support for barrel prices.

As major oil-producing nations prepare to move away from OPEC+ production limits in favor of balancing their government budgets, crude oil markets are bracing for the prospect of even more oversupply risks as global demand does not materialize in line with energy market expectations.

U.S. crude oil inventories increased again on a weekly basis after the American Petroleum Institute (API) reported a rise of 4.052 million barrels in weekly crude oil inventories, disregarding a forecast of a -1.9 million barrel decrease and significantly reducing the previous week’s -6.49 million barrel decrease. The Energy Information Administration (EIA) reported similar results, with a change in EIA crude oil inventories for the week ending May 31st increasing by 1.233 million when investors had forecasted a -2.3 million barrel decrease. The EIA barrel counts week over week previously showed a reduction of -4.156 million barrels.

Technical outlook for crude oil

WTI barrel bids recovered to $74.00 per barrel on Wednesday, but bullish momentum remains scarce, and U.S. crude oil is well below short-term highs. Daily candles closed in red for the last five consecutive trading days, and the thin gains represent the best crude oil buyers can do.

WTI remains trapped below short-term technical resistance at the 200-hour exponential moving average (EMA) at $76.10. U.S. crude oil tested its lowest bids since February, and the upside seems scarce.