WTI Tests $60.00 On Weak Inventories - Forex News by FX Leaders

WTI Tests $60.00 On Weak Inventories

Posted Wednesday, June 26, 2019 by
Shain Vernier • 1 min read

The crude oil inventories cycle is complete and WTI futures are on the move. Earlier, the EIA reported a massive 12 million barrel draw on supplies. This figure smashed expectations (-2.540 million) and last week’s figure (-3.106 million). Given the seasonal tendencies of WTI crude, buyers jumped into the market with both feet.

Inventories Drop, August WTI Crude Oil Futures Test $60.00

The past 24 hours have brought release of oil inventories numbers from the API and EIA. Here is a look at the data:

Event                                           Actual      Projected      Previous
API Crude Oil Stocks                -7.550M           NA             -0.821M
EIA Crude Oil Stocks              -12.788M       -2.540M       -3.106M

The numbers don’t lie: supply is declining in a big way. If this trend continues ahead of the 4th of July holiday, we may be in for a major jump in WTI by August.

WTI On The Bull Toward $60.00

It was seemingly only a matter of time before August WTI futures made a serious move toward $60.00. Earlier in the session, this market posted intraday highs at $59.93 before retreating.

August WTI Crude Oil Futures (CL), Daily Chart
August WTI Crude Oil Futures (CL), Daily Chart

Overview: At this point, the 5000-pound elephant in the room is the $60.00 handle. If trade is established above this level by Friday’s closing bell, next week may bring a swift move to $65.00 for WTI.

Going into July trade, I maintain a bullish bias toward global oil. We are in the midst of summertime buying, not to mention a fresh round of U.S./Iran tensions. Until we see a formidable pullback beneath $55.00, one has to think that yearly highs may be tested by mid-August at the latest.

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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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