WTI crude oil buyers ignore downbeat EIA report to prod $71.50 amid supply fears, softer US Dollar

• WTI crude oil price grinds higher after snapping three-day downtrend.
• EIA anticipated record high US shale production in June.
• Canada wildfire, OPEC+ output cut and geopolitical woes favor Oil supply woes and WTI bulls.
• Softer US Dollar, cautious optimism add strength to commodity’s recovery.

WTI crude oil stays defensive near $71.40 after an upbeat week-start, grinding higher following the first daily run-up in three amid early Tuesday’s Asian session. In doing so, the black gold portrays the market’s cautious mood amid mixed catalysts from the energy industry, as well as due to anxiety ahead of the key data/events.

That said, the price-negative reports from the US Energy Information Administration failed to impress WTI crude oil bears on Monday amid fears of depleting supply due to geopolitical concerns and the OPEC+ supply cuts. Adding strength to the energy benchmark’s price was a pullback in the US Dollar, amid cautious optimism.

“US Oil output from the seven biggest shale basins is due to rise in June to the highest on record,” per the latest EIA report released on Monday. Oil output is set to rise by 41,000 barrels per day (bpd) to 9.33 million bpd, adds the EIA.

On the other hand, wildfires rage again in Canada’s key Oil producing state Alberta and restricted global oil supplies. Reuters quotes Mizuho analyst Robert Yawger while saying that At least 300,000 barrels of Oil equivalent per day (boepd) production was shut in last week in Alberta.

On the other hand, OPEC+ leaders’ defense of the latest output cut and the Group of Seven (G7) nations’ plan to tighten sanctions on Russia join the downbeat US Dollar allows the WTI buyers to retake control, after a three-day absence, as well as the People’s Bank of China’s (PBOC) inaction. That said, the US Dollar Index (DXY) snapped a two-day uptrend while retreating from the five-week high.

Looking ahead, WTI crude oil buyers will pay attention to the US Retail Sales for April and a solution to the US debt ceiling problem for further ruling. Also important will be the weekly private oil inventory data from the American Petroleum Institute. Furthermore, China’s Industrial Production and Retail Sales for April will be also important for immediate Oil price direction.

Technical analysis

A three-week-old descending resistance line challenges WTI crude oil buyers around $71.55 even if $69.80-75 limits the short-term downside of the black gold price.