Oil remains under pressure after inventories; close to key support
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Crude oil inventories: +5.8M vs +2.0M exp. +3.2M prior. API +7.8M
US production jumps to 11.6M bpd - highest on record
Oil drops back below $72 and near 11 week low. 70.40 key support
What had looked like a promising move higher in oil earlier has fizzled out and the gains look like they could now be set to turn to losses after the latest inventory release showed another increase in US stockpiles. The price had spiked nearly 200 ticks off its recent lows on reports that Saudi Arabia and Russia were discussing delivering further supply cuts next year, but the DOE inventory release which also showed record US production has nipped the recovery in the bud for now. Turning to the release itself the following are shown in the format of actual vs expected unless otherwise stated:
DOE crude oil inventories: +5.8M vs +2.0M
Gasoline: +1.9M vs -1.7M
Distillates: -3.5M vs -2.0M
Cushing: +2.4M vs +1.9M last
US production: 11.6 mbd vs 11.3 mbpd
Even though the increase was smaller than the corresponding API release last night (+7.8M), it does still represent a 7th consecutive weekly rise and with the sizable jump higher in US production it’s not hard to see why the market has reacted negatively.
The push higher seen this morning has been erased since the inventory release with price back near its lowest level of the day 30 minutes after the DOE data dropped. Source: xStation
The daily chart for Oil shows price is not that far from the August lows around 70.40 and this could be seen as a key support. If the market continues lower and drops below there then price will reach its lowest level in over 6 months. Source: xStation
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