CL New York Crude Oil – Declining U.S. crude oil inventories supported prices, but remained capped by the 25-day moving average

Oil prices closed higher on Wednesday after data showed a larger-than-expected drop in U.S. crude oil inventories, while investors assessed the potential impact of new U.S. tariffs on India. U.S. crude oil futures rose 90 cents, or 1.4%, to settle at $64.15. The U.S. Energy Information Administration (EIA) reported that U.S. crude oil inventories fell by 2.4 million barrels to 418.3 million barrels last week, compared with expectations for a 1.9 million-barrel decrease. U.S. gasoline inventories fell by 1.2 million barrels, compared with expectations for a 2.2 million-barrel decrease. Distillate fuel inventories, including diesel and heating oil, fell by 1.8 million barrels, compared with expectations for an 885,000-barrel increase. Investors were focused on U.S. President Trump's decision to double tariffs on Indian imports to 50%. The tariffs, imposed on Indian purchases of Russian oil, took effect on Wednesday.

As seen on the technical chart, the MACD indicator has just broken above its signal line, suggesting continued upward momentum for oil prices. However, the key factor currently depends on whether the 25-day moving average can be crossed. The highs of the past two days were driven by this indicator. Currently, the 25-day moving average is at $64.80. Further targets are expected to extend to the 50-day moving average at $66.05 and the 250-day moving average at $68.10. The next level is $70.00/50, where oil prices reversed course in late July. The supporting levels are expected to revisit $63.00 and $62.30, with significant support expected at $61 or even $60.

Estimated Range:
Resistance: 64.80* – 66.05 - 68.15 – 70.00/50*
Support: 63.00 – 62.30 – 61.00 – 60.00*

This Week's Headlines:
EIA: U.S. distillate inventories fell by 1.786 million barrels in the first week of trading.
EIA: U.S. gasoline inventories fell by 1.236 million barrels in the first week of trading.
EIA: U.S. crude oil inventories fell by 2.392 million barrels in the first week of trading.
EIA: U.S. refinery utilization fell by 2.0 percentage points in the first week of trading.
EIA: U.S. crude oil imports increased by 299,000 barrels per day in the first week of trading.

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