Oil created bullish hammer on falling US inventories

• WTI oil recovered from one-month lows, creating bullish hammer on the daily chart.
• The American Petroleum Institute (API) reported a bigger drop in Us oil inventories.

WTI oil created a bullish hammer on Tuesday, signaling the sell-off from the May 22 high of $72.90 may have run out of steam.

Prices had hit a one month low of $64.23 on reports the US government has unofficially asked Saudi Arabia and some other OPEC producers to raise oil output.

However, the dip was short-lived as prices picked up a bid after the API data showed crude inventories fell by 2 million barrels in the week to June 1 to 432.8 million. The markets were expecting a drop of 1.8 million barrels.

As of writing, WTI is trading at $65.85/barrel - up 0.5 percent on the day. A close above the 10-day moving average (MA0 of $66.90 would add credence to the bullish hammer and confirm a short-term bullish trend reversal.

WTI Technical Levels

Resistance: $66.29 (100-hour MA), $66.90 (10-day MA), $67.33 (200-hour MA)

Support: $66.57 (session low), $65.35 (100-day MA), $64.23 (previous day's low)