Crude oil prices pared some of its earlier losses on Wednesday after the EIA report showed U.S. oil inventories dropped 1.9 million barrels in the week through May 29, where investors will carefully watch OPEC meeting this week.
Crude supplies slipped 2.8 million barrels in the week through May 22, where crude stockpiles marked its fourth straight weekly decline while gasoline stockpiles plummeted for a third week.
In spite of the consecutive drop in the U.S. buildup, which signaled a rise in demand, the inventory remains near the highest level for this time of year in at least 80 years.
However, oil supply is still believed to be high due to the rise in U.S. production, which pushed crude prices to a record low in January.
Baker Hughes will release its weekly U.S. rig count data for this week, after last week’s report signaled a decline in oil rigs by 13 to 646, the lowest since August 2010.
On June 5, OPEC members will convene to discuss whether to cut or hold their production quota, amid expectations of seeing no change in production output.
It seems that oil producers in the OPEC, more specifically GCC counties, are satisfied with the current price.
Crude oil futures for July delivery is currently trading around $60.44 a barrel, after rising from low of $59.69, while the session’s high was recorded at $61.31.
After it has found support near the session’s low, crude prices may resume its upside direction, shielded by the support line depicted on the daily chart.
Although crude prices managed to recover some of its earlier losses, it did not take advantage of the dollar’s tumble for a second straight session against a basket of major currencies.
The dollar index meanwhile hovers around 95.37, where it widened its losses after a report showing U.S. services activity eased expansion in May.