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Oil ends lower after US inventories report

FXStreet (Córdoba) - Crude oil failed to sustain early gains and ended in negative ground for the day after a report showed US crude stockpiles rose more than expected last week.

US Department of Energy reported US crude oil inventories rose by 3.073 million in the week ended Oct 2, exceeding expectations of a 2.200 million barrels, although down from the previous 3.955 million rise. DoE report offset yesterday’s API data that estimated inventories fell by 1.2 million barrels.

Crude ended the day around 1.5% down at $47.80, posting its first loss in four sessions. Oil prices have been supported this week by reports that Russia has expressed willingness to meet with other producers to discuss market conditions.

WTI technical view

“The daily chart shows that the price failed to hold above a sharply bearish 100 DMA, whilst the technical indicators have turned strongly lower from near overbought levels, but stand so far in positive territory. In the 4 hours chart, the 20 SMA maintains its bullish slope, providing an immediate short term support around 47.10, although the technical indicators have eased from overbought levels and are now approaching their mid-lines”, said Valeria Bednarik, chief analyst at FXStreet. “The upcoming direction will likely depend on Chinese stocks' behavior, as a decline there may lead to further declines in commodity prices during the upcoming session”.

Bednarik sees next supports at 47.10, 46.60 and 45.90, while she places resistance levels at 48.40, 49.05 and 50.00.

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