As the inflation rate of the world's largest economy slowed down more than expected, crude oil prices rallied sharply. However, after US government data showed an increase in crude oil inventories, oil prices plunged and gave back most of the daily gains.

Last week, US EIA crude oil inventories unexpectedly increased by 3.73 million barrels, far exceeding the expected decrease of 1.025 million barrels. In addition, the US strategic petroleum reserves (SPR) inventory increased by 339,000 barrels to 370.5 million barrels, an increase of 0.09%.

After the data was released, both crude oil prices turned directly downwards, with WTI crude oil turning down and falling below $78. Brent crude oil fell below $82 at one point.

Currently, oil prices have rebounded from the sell-off after OPEC+, indicating that speculative short positions may have reversed. Goldman Sachs Group said earlier this week that there is still significant scope for financial demand for oil contracts.

Martijn Rats, a commodities strategist at Morgan Stanley, told clients in a report, "In the short term, the oil market may tighten." The investment bank expects oil shortages in the third quarter to reach 1.2 million barrels per day, which could push Brent crude oil prices up to $86 per barrel.

Oil traders have been struggling with price fluctuations lately as the actual crude oil market is weak and the prospect of improved summer consumption is uncertain. The US predicted on Tuesday that its oil production increase for 2024 will exceed previous estimates, setting a new record, while the International Energy Agency (IEA) warned that oil supply will continue to be oversupplied for the remaining time of this decade.

"This week's sharp rebound has weakened the bearish control of the market, although more price action is needed to confirm the bottom. But after the recent recovery, we may see oil prices come under pressure again. Lower highs suggest that the shortest path with the least resistance is still downward unless there is a change in the technical aspect." said Fawad Razaqzada, a market analyst at City Index and Forex.com.