Crude Turning Higher Ahead of EIA Release

Weaker USD Helping Oil BullsCrude prices are rising today ahead of the next EIA release scheduled for later this afternoon. The current weakness in USD is helping underpin the market, which is also being lifted by bullish sentiment in stocks currently. On the back of recent weakness in US data, rate hike projections for next month’s FOMC have fallen, allowing for risk assets to improve near-term. This week, a slew of key US data, starting with the ADP employment number and prelim GDP reading later today, will be key for determining the path of USD. If USD continues lower through the week this should help support oil prices for a further recovery.All Eyes on the EIAThe expectation for today’s EIA release is bullish on the back of yesterday’s API reading. The API reported an 11.5-million-barrel drawdown in US crude stores. If such a drawdown is confirmed today by the EIA, this should be firmly positive for oil prices dependent on what we see from those two US data points. The market is expecting the EIA to report a 2.2-million-barrel drawdown which should be enough to keep oil price supported near-term. If we see a bigger drawdown than forecast, this might prompt a larger reaction in the market. On Friday, the latest round of US jobs data will be the headline event for the week. If we see any heavy selling in USD on the back of the data, oil prices could well rise back up towards the YTD highs.Technical ViewsCrudeThe reversal back below the 82.59 level looks to have run its course for now with crude prices bottoming out and since turning higher again. Price is now close to testing the 82.59 level once more and, with momentum studies pushing higher, the focus is on a fresh break. Bulls need to see a swift move higher here or run the risk of the market carving out a lower high, turning focus back to support at 72.61.