By Barani Krishnan

Investing.com – Crude prices notched a fifth straight weekly win, but a knee-jerk tumble to mounting U.S. gasoline inventories and Wall Street’s worst days since the coronavirus pandemic were signs that a market closer to $90 a barrel may ultimately create more headwinds for oil longs.

Craig Elam from OANDA said crude is running into resistance and losing momentum on the way to $90.  “It’s a big psychological barrier as once that goes, people are just counting down the days until we have triple-figure oil,” he said, referring to forecasts for $100 a barrel. “It’s a big deal.”

U.S. crude oil settled at $85.4/barrel, down 41c or 0.5%. Earlier in Friday’s session, WTI tumbled more than $4, or 5%. WTI hit an all-time high of $87.91 Wednesday. This was its highest level in seven years. The stock is up by more than 1% for the week and has increased around 20% in the last five weeks.

Brent, the international benchmark for oil traded in London, fell 49 cents to $87.89 a barrel. That’s 0.6% less than it was on Thursday. Brent rose 2% in the week and was around 20% higher over the five previous weeks. It had hit a seven year high of $89.48 last Thursday.

U.S. gasoline inventories rose by 6 million barrels and ballooned to a new record 24,000,000 barrels in three weeks. This was despite weak demand, which contrasts with the rise in oil prices. Data from the Energy Information Administration on Thursday showed.

The data suggests that as demand for gasoline, America’s preeminent fuel product, has cratered since the end of holiday travels for the 2021 year-end.

The U.S. oil refiners appear to have a surplus of crude oil, which is fueling a lot of driving and work commutes. However the Omicron coronavirus reduced some of these activities.

The stockpile of crude oil in the United States saw an increase for the first week in eight weeks. It grew 515,000 barrels, following a decline of 4.55 million the week before. The current gasoline market balance is partly explained by the fact that crude oil stockpiles have fallen to 6 million barrels in just three weeks.

The U.S. inventory of oil distillates which is used in the production of diesel, for vehicles, buses and trains as well as jet fuel, fell by 1.43 million barrels after an increase from 2.54million last week.

Wall Street suffered its most severe tumult since March 2020’s Covid epidemic. Investors tried to lower stock market valuations that were inflated during the 2-year pandemic. Fears of a Federal Reserve rate increase in the next pandemic era were also factors that triggered Wall Street’s sell-off. The Federal Reserve is trying to combat inflation at its 40-year peak.