Crude Oil Jumps $2 Higher, After EIA Inventory Drawdown, Gold Bounces off Support
Crude Oil made a strong bullish reversal today after the EIA inventories, despite risk currencies turning bearish today
As North American trading got underway, the US dollar started experiencing some decent buying. This upward movement is particularly affecting commodity currencies and the GBP, causing them to weaken. sending GBP/USD around 140 pips lower. Additionally, USD/JPY reached a new seven-month high, climbing above 144.60.
Crude Oil was also slipping lower, falling to $67 lows, but made a reversal and has gained more than $2 in the last few hours. That surge came after the EIA inventories showed a huge drawdown last week. According to the Energy Information Administration (EIA), there was a significant drawdown in crude oil inventories of 9.6 million barrels for the week ending June 23. In the previous week, there was a smaller inventory decline of 3.8 million barrels, which did not have a substantial impact on prices.
In terms of fuel inventories, the EIA reported modest builds. Gasoline inventories increased by 600,000 barrels during the week ending June 23, while daily production averaged 10.1 million barrels.
Crude Oil H4 Chart – Price Heading for $70 Again
Weekly petroleum inventories from the US EIA
- Weekly crude oil inventories -9.603 million versus -1.757 million estimate
- Prior week inventories were -3.831 million
- Crude oil -9.603 million versus -1.757 million estimate
- Gasoline 0.603 million versus -0.126 million estimate
- Distillates 0.124 million versus +0.782 million estimate
- Refinery utilization -0.9% versus 0.2% expected
- SPR draw 1.467 million
Private oil inventories released late yesterday showed:
- Crude -2.408 million
- Gasoline -2.85 million
- Distillates +777, 000
A bigger than expected drawdown in inventories. The WTI crude oil is trading at $69.60 that’s up $01.50 on the day, with the low price today reaching $67.05. Although, central bankers continue to remain hawkish, as their comments at the ECB forum indicated, which are bearish for Oil.
The President of the European Central Bank (ECB), Christine Lagarde, reiterated in a speech on Tuesday that inflation levels remained persistently high and central banks were not yet finished with tightening monetary policy. She further cautioned that another rate hike from the ECB could be expected next month. So, we are thinking about opening a long-term sell Oil signal, probably at the resistance zone around $70 or at moving averages around $70.50. Gold has also made a bullish reversal, after touching $1,903. We are already long on Gold, so let’s see if the bounce will continue.
US WTI Crude Oil
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