Crude Oil Price Closes January in Gains, But Rally Fades at 200 SMA
Crude Oil was trending down from September until the end of 2023, however, it turned bullish in January and gained around $10 from the bottom to the top. however, the climb stopped right at the 100 daily SMA and despite heightened tensions in the Middle East, the price has reversed down and lost $3 since Monday’s highs.
West Texas Intermediate (WTI) crude oil was testing the 100 early this week which stood at $79, but China’s anxieties have returned, with the Evergrande Group being ordered for liquidation on Monday. Yesterday we saw more negative news from the world’s top oil importer, with soft factory activity figures, which increased concerns about demand growth in China. The Manufacturing PMI index increased to 49.2 points in January from 49.0 previously, which despite showing an improvement, still remains in contraction. T
Yesterday the EIA inventories were released ahead of the FED meeting, which postponed the first rate cut to May, sending the USD higher. That also had some negative impact on oil late in the Day. However, the buildup in inventories despite being lower than expectations, is another negative element for crude Oil.
EIA Inventories for the Week Ending January 26, 2024
- EIA crude oil inventories +1,234K vs -2,150K expected
- Prior oil inventories were -9,233K
- Gasoline +1,156K vs +1,483K expected
- Distillates -2,542K vs +425K expected
- Refinery utilization +2.6% vs +2.1% expected
- Production 13.0 mbpd vs 12.3 mbpd
- Impld mogas demand: 8.14 mbpd mbpd vs 7.88 mbpd prior
API Inventories Data from late Yesterday:
- Crude oil inventories: -2,500K
- Gasoline inventories:+600K
- Distillates:-2,100K
The report showed crude oil and gasoline stockpiles distillate fuel stocks in the United States climbed, while refineries cut capacity utilization. Crude-oil stockpiles excluding the Strategic Petroleum Reserve increased by 1.234 million barrels last week, which increased the total amount of inventories to 421.9 million barrels. That’s 5% lower than the five-year average for the time of year. So, we are also turning bearish on Oil now, and are looking at $74 as the first support where we might see a bounce.
US WTI Crude Oil Live Chart
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