Summary:
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Crude Oil inventories: -9.6M vs +0.6M exp
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US production ticks higher once more: 12.1 Mbpd
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Oil.WTI surges back near 2019 high
The main scheduled event of the week for Oil traders has seen a massive drawdown in the latest inventory release, but a further rise in US production has taken the shine off what otherwise appears to be a strongly supportive reading for the price of crude. The weekly EIA number came in at -9.6M against a consensus forecast of +0.6M. Last week saw a drop of 3.9M and now 3 out of the last 4 releases have shown sizable declines. The fall was also larger than last night’s API reading which delivered an unexpected decline of 2.1M.
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US Oil Inventories has dipped below the 5-year average after the latest weekly release. The current level is now approaching a similar level to that seen this time last year. Source: XTB Macrobond
In addition to the headline, the subcomponents of the release can determine how the market reacts to the data, and there was more good news on this front for Oil bulls, with large drops in Gasoline and Distillates. The readings specifically were:
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Gasoline: -4.6M vs -2.5M exp
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Distillates: -4.1M vs -1.5M exp
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Cushing: -0.5M vs -0.7M (no expected)
While these readings all appear good for the market, there was another increase in US production, which hit a new record high of 12.1 Mbpd, after a print of 12.0 Mbpd.
Oil.WTI is back near its 5-month highs after the data with a longer term head and shoulders still in play. 59.90 could be seen as possible resistance, 57.50 potential support. 8/21 EMAs still indicate an uptrend. Source: xStation
