Crude Oil stops the hemorrhaging temporarily following API inventory declines

• Oil halts decline following surprise API contraction.
• Fossils still under pressure from FOMC outlook, firming Greenback

Crude oil halted its recent decline following a surprise contraction in crude inventories, and WTI is currently trading near 61.25 per barrel while Brent floats just above 65.00.

Oil has been dropping recently as rising bond yields and inflation fears chip away at equity indexes and commodities. Tuesday's decline in crude prices comes on the heels of a lopsided FOMC meeting, where FOMC members highlighted risks and imbalances within the US economy, but overall inflation expectations were still raised, sending the US Dollar surging.

The oil slide halted on the back a surprise contraction in API Weekly Crude Oil Stocks that saw inventories decline by 900,000 barrels, a downside beat to the million-plus surge that was anticipated. Despite the shrinkage, US oil production is still at record highs, and OPEC is struggling to stem the flow of oil production that is currently flooding supply chains.

Oil Technicals

WTI and Brent are both still deeply off their 2018 highs of 66.63 and 71.26 respectively, with WTI bouncing off 58.11 and Brent recovering from 61.79. With the recent recovery likely a retracement instead of an outright reversal, support for WTI and Brent currently sits at 60.90 and 64.40 respectively, while WTI sees strong resistance from 62.60 with Brent resistance at 64.40.