Last week, crude oil inventories increased by 5.8 million barrels, the strongest since April. This can be seen in terms of rebounding last week's powerful, record fall in inventories. The API indicated a modest increase in inventories and the consensus expected a drop by over 4 million barrels. Gasoline stocks fell by 3.2 million barrels and distillates by 370 thousand barrels. At the same time, the Department of Energy announced that the first time in the history of mining in the US reached the amount of 11 million barrels per day.

However, last week was not the best for the oil, which lost almost 4% in five sessions. The last few days were full of surprises, like the announcement by the EIA of the largest decline in crude oil inventories in history (-11.8 million, exp. -6.8 million). Reducing the stocks of the oil, which is a factor which in theory should exert a downward pressure on oil prices, seemed not to be taken into account by investors. Information on Libya, which announced that it will soon return to full oil production, has drowned out EIA publications. The renewed export would mean adding about 700,000 to the market barrels a day.There are not many arguments that would suggest an increase in oil prices in the near future. Investors speculate that trade-related friction between the US and China may negatively affect global demand. The last threat of imposing customs duties in the amount of 10% for Chinese products with a total value of USD 200 billion by the US government, only reinforce the fears of a further escalation of the conflict between the two powers. In addition, the suggestion that the US would start to push Russia to increase the level of oil extraction negatively impacts on oil prices. The United States itself is not idle either. The EIA forecasts that US oil production will increase to almost 12 million barrels per day in 2019, which would be almost 1 million more than at present. The price of oil is also not helped by the fact that the scenario in which the US repeals the sanctions imposed on Iran is becoming more and more possible. The return of Iran to the group of oil producers could have a negative impact on prices.

Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market plummets slightly below the 61% Fibo at the level of 68.07 and made a local low at the level of 67.17, which will now act as a support for the price. Due to the oversold market conditions, the price is bouncing a little, but the momentum indicator is still below its fifty level, so the spike higher did not even violate the level of 69.24 resistance. In the short term, oil should consolidate horizontally under the round number of 70 USD for some time.