Brent and WTI Slip Below Key Resistance Amid Bearish Inventory Data

Oil prices retreated in early Wednesday trading following a four-day rally that had pushed both benchmarks to two-week highs. Brent crude futures dipped 0.47% to $66.32 per barrel while WTI crude declined 0.43% to $63.39.

This pullback followed Tuesday’s impressive gains where Brent rose 2.57% and WTI jumped 2.8%. The American Petroleum Institute reported an unexpected 4.29 million barrel increase in U.S. crude inventories.

This marked the largest weekly build in six weeks, surprising analysts who had predicted a 2.4 million barrel reduction. Gasoline inventories simultaneously fell by 1.4 million barrels while distillate stocks dropped 3.7 million barrels.

Tuesday’s strong performance stemmed from the temporary U.S.-China tariff reduction agreement announced Monday. Both economic powerhouses agreed to pause their trade conflict for at least 90 days.

The United States lowered tariffs from 145% to 30% while China reduced duties on U.S. imports from 125% to 10%. Technical indicators reveal a market at a critical juncture.

WTI crude has established a solid recovery from April lows around $56.43 and now tests key resistance at $63.31. The 100-day Simple Moving Average recently crossed above the 200-day SMA, traditionally signaling bullish momentum.

However, warning signs have emerged. The Relative Strength Index displays weakening bullish momentum with lower highs while prices continue forming higher highs. This bearish divergence suggests buyers may lose steam at current levels.

Geopolitical tensions add complexity to market dynamics. President Trump stated during his Saudi Arabia visit that maximum pressure will target Iranian energy exports without a nuclear agreement. The U.S. Treasury just sanctioned a network facilitating Iranian oil shipments to China.

OPEC+ production continues exceeding earlier projections, with May output expected to increase by 411,000 barrels per day. Saudi Arabia maintains stable export levels to China despite overall increases. Market analysts note this supply growth offsets some positive sentiment from improved trade relations.

The dollar index fell 0.67% Tuesday after lower-than-expected U.S. inflation data. This dollar weakness typically makes oil more affordable for buyers using other currencies.

Year-to-date, Brent crude has decreased 11.09% while both benchmarks remain down over 10% in 2025. Traders now focus on today’s official EIA inventory report and President Trump’s ongoing Middle East visit during peak fuel demand season.

U.S. energy producers warn this price environment threatens domestic production growth. Industry executives suggest American oil production may have peaked and could begin declining this quarter if prices remain near current levels.

Related coverage: Gold Retreats as US-China Trade Tensions Ease, Technical Support Holds Firm · Brazilian Real Maintains Strength Against Dollar Amid Lower U.S. Inflation Expectations · Copper Market Takes Breather After Trade Deal Rally as Technical Signals Mixed · Iron Ore Breaks $100 Barrier Amid China Monetary Stimulus

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error

LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.