Crude oil trading alert: The sharp drop in API inventories is unlikely to reverse the weak structure of US crude oil, and it may continue its downward trend in the short term.
2025-11-05 09:55:52
On Wednesday during Asian trading hours, US crude oil traded at $60.12 per barrel, continuing its downward trend. In terms of news, API data showed that US crude oil inventories fell sharply by 6.5 million barrels in the latest week, far exceeding the market expectation of about 1.3 million barrels.
This data suggests that domestic demand in the United States has rebounded, or exports have increased, while also reflecting that refineries have entered a seasonal expansion phase, leading to a significant acceleration in crude oil consumption.
From the supply side, this data is bullish for oil prices. However, WTI oil prices did not rebound significantly as a result. The market still faces pressure from a stronger dollar.
The US dollar index remaining high near 100 means that it will be more expensive for overseas buyers to purchase dollar-denominated crude oil, thereby suppressing demand.
Furthermore, despite the sharp drop in inventories, the market remains cautious about the global demand outlook, especially against the backdrop of slowing economic growth. There are widespread concerns that supply remains ample and that positive news is unlikely to immediately translate into a trend-driven rebound.
Technical analysis also indicates that bears still have the upper hand. WTI prices are currently hovering around $60.20 per barrel, with short-term support in the $59.65–$60.00 range. If this level is broken, oil prices could fall further to around $57.30 or even $56.
The previous support zone of $61.50–$62.00 has now turned into resistance, becoming the main obstacle to a short-term rebound. If it cannot be effectively broken through, the rebound in oil prices will be limited.
The RSI indicator is around 47, indicating weak momentum and suggesting that bulls have not yet gained market dominance. Volume distribution also shows significant selling pressure in the $60-$62 range. Overall, while declining inventories provide short-term support, a strong dollar and demand uncertainty continue to constrain oil price rebounds.
Unless WTI breaks through $62 and recovers key moving averages, oil prices are likely to remain weak and fluctuate around $60.
Editor's Note:
A sharp drop of 6.5 million barrels in inventories is clearly bullish for oil prices, but not enough to reverse the downtrend. In the short term, oil prices may fluctuate around $60, with downside risks remaining; in the medium term, if WTI fails to break through the technical resistance above $62, the rebound is likely to be limited.
Closely monitoring subsequent EIA inventory data and the dollar's performance will be key indicators for judging the medium-term trend of oil prices.
This data suggests that domestic demand in the United States has rebounded, or exports have increased, while also reflecting that refineries have entered a seasonal expansion phase, leading to a significant acceleration in crude oil consumption.
From the supply side, this data is bullish for oil prices. However, WTI oil prices did not rebound significantly as a result. The market still faces pressure from a stronger dollar.
The US dollar index remaining high near 100 means that it will be more expensive for overseas buyers to purchase dollar-denominated crude oil, thereby suppressing demand.
Furthermore, despite the sharp drop in inventories, the market remains cautious about the global demand outlook, especially against the backdrop of slowing economic growth. There are widespread concerns that supply remains ample and that positive news is unlikely to immediately translate into a trend-driven rebound.
Technical analysis also indicates that bears still have the upper hand. WTI prices are currently hovering around $60.20 per barrel, with short-term support in the $59.65–$60.00 range. If this level is broken, oil prices could fall further to around $57.30 or even $56.
The previous support zone of $61.50–$62.00 has now turned into resistance, becoming the main obstacle to a short-term rebound. If it cannot be effectively broken through, the rebound in oil prices will be limited.
The RSI indicator is around 47, indicating weak momentum and suggesting that bulls have not yet gained market dominance. Volume distribution also shows significant selling pressure in the $60-$62 range. Overall, while declining inventories provide short-term support, a strong dollar and demand uncertainty continue to constrain oil price rebounds.
Unless WTI breaks through $62 and recovers key moving averages, oil prices are likely to remain weak and fluctuate around $60.
Editor's Note:
A sharp drop of 6.5 million barrels in inventories is clearly bullish for oil prices, but not enough to reverse the downtrend. In the short term, oil prices may fluctuate around $60, with downside risks remaining; in the medium term, if WTI fails to break through the technical resistance above $62, the rebound is likely to be limited.
Closely monitoring subsequent EIA inventory data and the dollar's performance will be key indicators for judging the medium-term trend of oil prices.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
