Oil Rebounds to $59 as US Inventories Drop – Reversal Ahead?

After recent declines, crude oil futures (CL1!) staged a modest recovery during Thursday’s session, trading near $59.10 per barrel. The rebound comes as US crude inventories unexpectedly dropped, easing concerns about oversupply and providing a short-term lift to prices.

Key Drivers Behind the Rebound
US Inventory Drawdown – The latest EIA report showed a decline in crude stockpiles, signaling stronger demand and helping prices stabilize.

Technical Support Holds Firm – The bounce aligns with a critical daily demand zone, which previously acted as a strong support level on the weekly chart.

Market Sentiment Shifts – While retail traders remain bearish, commercial traders (often considered "smart money") are increasing long positions, hinting at a potential trend reversal.

Traders should watch for follow-through buying to confirm whether this is a short-term correction or the start of a larger reversal.

Bottom Line: Oil’s rebound is fueled by fundamentals (lower inventories) and technicals (strong demand zone). With commercial traders betting on higher prices, the stage may be set for a bullish reversal—if buyers sustain momentum.

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