Oil prices jumped this afternoon. The upward move was launched after White House officially announced the release of Strategic Petroleum Reserves (SPR). The United States will release a total of 50 million barrels of oil from its strategic reserves - slightly more than expected. White House announced that China, Japan, India, South Korea and the United Kingdom will also release reserves. India has already announced a 5 million barrel release. Remaining countries have not made announcements yet.
The move was aimed at lowering oil prices and easing burden for consumers. Oil moved lower in a knee-jerk move but this drop was quickly recouped and crude prices rallied to daily highs. It looks like classic "buy-the-rumour, sell-the-fact" play. Market has been moving lower in recent days on expectations of SPR release. However, there was some uncertainty over the size of the release. As there is more clarity on the issue right now, the main downside catalyst for oil prices disappeared. Response from OPEC+ to strategic reserve release is a key near-term factor for oil prices now.
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A look at WTI chart (OIL.WTI) at hourly time frame shows that price bounced off recent lows in the $75.30 area and moved towards the topside resistance of the recent trading range above $76.50. According to classic technical analysis, breaking above the range could trigger an around $1.40 upward move and may lead to a test of the upper limit of the local market geometry at $77.90. Source: xStation5
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