Crude Oil Rallies Past $100 on Inventory Drawdowns

Crude oil prices are experiencing a notable upward trend, with Brent crude trading up 3.62% on the day at $101.46 and WTI crude also advancing 3.67% to $96.44. This rally represents a substantial gain of nearly $6 per barrel week-over-week for both benchmarks.

The upward momentum is underpinned by tightening U.S. oil inventories. The American Petroleum Institute reported an estimated draw of 300,000 barrels for the week ending September 4, following a larger draw of 2.6 million barrels in the preceding week. Overall, U.S. commercial crude inventories have seen a significant drawdown of over 48 million barrels in the last 21 weeks. Additionally, gasoline inventories were 6% below the five-year average, and distillate inventories were 14% below the five-year average for this time of year, signaling robust demand relative to supply.

## Catalyst Analysis: Inventory Draws and Price Rally

## Technical Analysis & Key Risk Watch $XLE+WL is trading at $62.68 with an RSI14 of 69.7. Key levels to watch for $XLE+WL are R2 $63.02, R1 $62.69, S1 $62.56, and S2 $61.55. The energy sector ETF shows strong upward momentum, nearing its R1 resistance level, with an RSI indicating it is approaching overbought territory.

## Impact on Energy Equities

Investors are closely monitoring the energy markets as inventory levels continue to fall and crude oil prices breach key psychological levels. The sustained drawdowns suggest underlying demand strength, potentially supporting higher energy prices and benefiting energy sector equities.