Summary:
-
EIA inventories: -3.1M
-
Gasoline and distillates show sizable builds
-
Oil remains under pressure after Tuesday’s sell-off
The weekly crude oil inventory release from the EIA has shown a slightly larger than expected drawdown, although the report overall is pretty mixed. There was a lot of noise in the immediate aftermath, but in general it appears that the news has not provided a bullish enough catalyst to see more of yesterday’s declines recoup and price is drifting towards the recent low of 63.80. Selected figures from the release are shown below:
Start investing today or test a free demo
Open account Try demo Download mobile app Download mobile app-
EIA Inventories: -3.1M vs -2.7M exp. -9.5M prior
-
API (released last night): -1.4M vs -2.7M exp
-
Gasoline: +3.6M vs -2.4M exp.
-
Distillates: +5.7M vs -1.0M exp
-
Production: -0.3M bpd
-
Refinery utilisation: -0.3% vs -0.3% exp
The initial reaction saw the market trade in a typically volatile fashion but as the dust settles on balance, it seems to be mildly negative with price trading at new low levels for the day. Source: xStation
The longer term picture for crude oil is a little unclear at the moment with Tuesday’s session seeing the largest drop in several weeks. The root cause of the selling appears to have been caused by an apparent de-escalation in the US-Iran tensions which have threatened for quite some time now to cause a supply side shock. Technically speaking, a rising channel from the low seen last month is now being tested and a break below there would pave the way for a significant decline. This appears to be a potential bear flag and should price take out recent lows around 63.80 then a retest of the area just below $60 a barrel could well follow.
Oil is testing some potentially key longer term support and a possible bear flag can be seen on D1. Source: xStation
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.