WTI retraces daily drop to turn flat near $64 post-EIA

• Crude oil inventories decreased by 6.9 million barrels.
• Oil production in the U.S. continues to increase.

Crude oil prices started to recover its daily losses in the NA session after the EIA reported a larger-than-expected draw in crude oil stocks in the U.S. As of writing, the barrel of West Texas Intermediate was trading at $63.97, virtually unchanged on the day.

According to the weekly report released by the Energy Information Administration, crude oil stocks in the U.S. decreased by 6.9 million barrels for the week ending January 12. Further details of the report revealed that oil production for the same week increased by 258,000 barrels to 9.75 mbpd. Extremely cold weather conditions in the U.S. continue to keep the demand for heating-oil high.

Earlier today, OPEC also released its monthly report, which showed that the forecast of non-OPEC oil supply was revised up by 0.16mbd in 2018 amid higher output expectations from the U.S. and Canada, and weighed on crude oil prices. "Higher oil prices are bringing more supply to the market, particularly in North America and specifically tight oil," the report read.

Despite this recent fluctuation, however, crude oil prices are having a difficult time finding direction. After finding a tough resistance just a little below the $65 mark at the beginning of the week, the barrel of WTI is moving in a relatively tight $1.5 range.

Technical levels to consider

With a decisive break above $65, the WTI could aim for $66 (psychological level) and $66.90 (Dec. 5, 2015, high). On the flip side, supports are located at $63.30 (Jan. 17 low), $61.80 (Jan. 9 low) and $61 (psychological level).