Crude Oil Holds the Uptrend Despite Large Buildup in EIA Inventories
Despite a weakening global economy and growing concerns about China’s economy, which is having problems in a variety of areas, crude Oil has turned positive since early July. After central banks have raised interest rates to extraordinary levels, many anticipate that major economies would enter or very nearly enter a recession. Since the price bounced off the support zone around $67, the efforts of Saudi Arabia and other OPEC+ members to reduce output have maintained Oil prices positive for more than two months.
WTI Oil H4 Chart – MAs Keeping the Trend Bullish
Yesterday US crude Oil retreated just below $90
Moving averages have been acting as support on the H4 chart as shown on the image above and following OPEC’s statement in its monthly report that supply shortages might lower global Oil stockpiles by 3.3 million barrels/day in the fourth quarter of this year, the market spiked on Tuesday. The global deficit would be at its highest level since 2007.
The price of UK Brent Oil has increased by over 25% since the beignning of July, while the price of West Texas Intermediate (WTI), the U.S. benchmark, has increased by around 30% during this period, with the OPEC report sending the price above $89, reaching a high of $8967. However, according to some analysts and a U.S. government research, prices may have already peaked in the near future, although we will keep buying pullbacks until that happens. Yesterday we saw a decent buildup in the EIA inventories, but that didn’t hurt Oil prices too much, which means that the buying pressure is strong.
Weekly EIA US Crude Oil Inventories
- Weekly crude oil inventories +3,954K vs -1,912K expected
- Prior week inventories were -6,307K
- Gasoline +5,560K vs +237K expected
- Distillates +3,931K vs +1,303K expected
- Refinery utilization +0.6% vs -0.4% expected
- Production estimate 12.9 mbpd vs 12.8 mbpd prior
- Impld mogas demand: 8.31 mbpd vs 9.32 mbpd prior
API data released earlier showed:
- Crude +1174K
- Gasoline +4210K
- Distillates +2592K
That’s a big drop in the weekly gasoline demand number but it’s not a huge surprise given the usual post-Labor Day decline and the volatility in the numbers.
US WTI Crude Oil Live Chart
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