Huge EIA Crude Inventory Drawdown Doesn’t Help Oil Prices
Crude Oil prices have been increasing since early December, with WTI crude climbing to $87.60 in the first week of April but are bearish now
Crude Oil prices have been increasing since early December, with WTI crude climbing to $87.60 in the first week of April, but they turned bearish and have been declining since then. Today we saw a major decline in EIA crude inventories, but that didn’t help the price of Oil move higher, which shows that sellers are in charge at the moment.
The WTI crude oil price range isn’t too big today the price feels heavy, with a slight downtick, despite the release of the weekly US inventory data which showed a consierable buildup. Yesterday’s significant intraday increase in Oil prices suggests that the private inventory figures may have been leaked or compromised.
The unexpected drawdown of 6.3 million barrels reported by the EIA today, compared to the anticipated build of 0.8 million barrels, further supported the bullish sentiment, but buyers are not coming. However, with the recent easing tensions in the Middle East, the fact that oil prices are holding steady around the levels seen at the beginning of the week is considered a victory for the bulls. If Oil prices can sustain consolidation above $80 for another week or two, there is a likelihood that bullish momentum could push prices toward the $90 mark. Otherwise we might see a dive to $70.
WTI Oil Chart H4 – The 50 SMA Has Turned Into Resistance
- The EIA’s weekly US oil inventories report revealed a significant drawdown of 6,368,000 barrels, contrary to expectations of an 825,000 barrel build. This marked a notable deviation from the prior report, which showed an increase of 2,735,000 barrels.
- Gasoline inventories also saw a decrease, albeit smaller than anticipated, with a drawdown of 634,000 barrels compared to an expected decrease of 1,775,000 barrels.
- Distillate inventories, however, saw an unexpected increase of 1,614,000 barrels, in contrast to expectations of a decrease of 1,093,000 barrels.
- Refinery utilization showed a slight increase of 0.4%, falling short of the expected 0.6% increase.
- Private inventories from late yesterday also indicated a drawdown in oil inventories of 3,230,000 barrels, a decrease in gasoline inventories of 595,000 barrels, and an increase in distillate inventories of 724,000 barrels.
WTI Crude Oil Live Chart
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