The latest Energy Information Administration report delivered on Wednesday showed that US crude inventories declined by 4.727 million barrels during the week ended July 14th following substantial declines the prior two weeks. US oil inventories have now fallen in 13 of the past 15 weeks. However, Brent crude continues to remain below the key psychological mark of $50.00 per barrel. Persistently high supplies from the Organization of the Petroleum Exporting Countries, despite a pledge to curb output, have failed to tighten the bloated market.
Furthermore, US oil production hit a fresh cycle high, posing additional risks to the outlook. Brent crude futures are currently trading around $49.70 a barrel, with $50.20 representing the immediate resistance on the upside. Any close above that level will complete the formation of a bullish head and shoulders pattern, potentially targeting $52.50 a barrel.