Crude Oil Slips Below $70 – API Report Awaited
Arslan Butt • 1 min read
It’s been quite a volatile session for WTI crude oil yesterday as the prices fell 4% as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers. In this update, we are going to take a quick overview of the major fundamentals and technical indicators today. Are you up for it?
API Stockpiles Report
The American Petroleum Institute is due to report the weekly inventory levels of the U.S. crude oil at 20:30 (GMT). The figure shows how much oil and product is available in stores.
This specific indicator provides a summary of the U.S. petroleum demand. Simply, the draw in inventories boosts the prices of crude oil, whereas, the inventory builds reduces the prices over lower demand concerns.
During the previous week, API reported a draw of -6.796M barrels. Russia and Libya seem to hike the production lately. Logically it should increase the supplies and we can expect API to report a build in inventories. But it’s a tough call as Iran, the 3rd biggest oil exporter in OPEC, may export only two-thirds of its supplies because of new U.S. sanctions. That’s putting oil markets under huge pressure amid supply interruptions worldwide.
What’s on the technical side?
As you can see on the daily chart, crude oil has dropped below 70, crossing 50 periods EMA from the upper side. For the moment, it’s trading above a bullish trendline support at $66. The leading indicator RSI is entering the sell zone.
The continuation of the bearish trend will likely lead crude oil towards $66.45. But before taking a sell position, it’s better to see API report.