Summary:
-
Weekly DOE inventories: -5.8M vs -1.6M exp. +6.8M prior
-
Similar to last night’s API equivalent (-5.2M); Production ticks higher
-
Oil remains firmly higher on the day with gains coming prior to the release
The latest crude data from the US has shown a sharp drop in stockpiles but with the decline being similar to last night’s API number and when you also consider the production rose again, then it is understandable why the price has paused after earlier making strong gains. Price was higher by almost 2% ahead of the release, rising to its highest level of the week but while today’s release was the largest decline since late July, it has as of yet, failed to provide the catalyst for an extension to the upside.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
The initial reaction to the release saw Oil drop lower, but price swiftly recovered and is making news highs and up by more than 2% on the day at the time of writing. Source: xStation
A headline print of -5.8M was well below the -2.0M consensus forecast, but given that there was a large and similar size drawdown in last night’s API figure (-5.2M) it is arguably not that positive for crude. In addition US production also rose once more, moving up to 11.0 mbpd from 10.9 mpbd previously. The components were also not that positive for the price of crude, listed below in the form of actual vs expected unless otherwise stated:
-
Gasoline: +1.2M vs -1.1M
-
Distillates: +1.8M vs +1.4M
-
Cushing: +0.8M vs +1.6M prior
The longer term picture for crude seems to remain one of range bound trade with price enjoying a good bounce off the key support level around 70.35. The market is now approaching the middle of this range in the mid70s with 80 offering a ceiling and capping recent advances. Source: xStation
