Crude Oil Bounces Above $80 As Global Tensions Increase Again
Crude oil has been quite volatile this month. Following the Middle East tensions, WTI Oil started around $80 in October and increased further until reaching $89.90, but failed to reach the big round level at $90 and reversed far below September’s high at $95. Moving averages turned into resistance on the H4 chart, halting the upward momentum. The significant increase in US EIA inventory last week had no impact as risk sentiment is driving the markets now.
WTI bids have closed in the negative for three consecutive trading days in the United States, and despite Wednesday’s fear-fueled rally, WTI is still down more than 6% from last Friday’s high of $89.60. WTI Crude Oil fell to a low of $81.90 yesterday before rallying to $85.60 due to global tensions as the Gaza conflict escalated, closing the day around $85.00.
The Energy Information Administration (EIA) barrel count indicated a surprising increase for the week ending October 20th, with US crude stockpiles climbing by 1.371 million barrels, above the 0.239 million market estimate, and eating away a major amount of the previous week’s -4.491 million barrel decrease. But, once again the EIA inventories didn’t have any impact on Oil. So, traders will just follow the Gaza conflict to trade Oil for now and so will we.
Weekly US oil data for the week ending October 20
- US oil inventories +1,371K vs +239K expected
- Prior week inventories were -4491K
- Gasoline +156K vs -897K expected
- Distillates -1,686K vs -1,168K expected
- Refinery utilization -0.5% vs +0.4% expected
- Implied mogas demand 8.86m vs 8.94m prior
- Domestic production 13.2 mbpd vs 13.2 mbpd prior
Late yesterday’s API data:
- Crude -2,668K
- Gasoline -4,169K
- Distillates -2,313K
- Cushing +513K
WTI has declined for four days in a row and was down 4 cents ahead of the data to $82.10 as geopolitical fears cooled down. These numbers aren’t as bullish as the API report and Oil is testing $83.00 afterwards. The October low was $81.50. But, it’s back up above $85 now as the tensions in the Middle East heat up again.
US WTI Crude Oil Live Chart
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