Oil Prices Recover From Below $73 as EIA Inventories Fall

Today, we observed an increase in EIA crude oil stocks, coinciding with a continued decline in crude Oil prices. Last week, oil prices were unable to break through the 200-day moving average, staying below $80, which triggered a renewed downward trend this week as global tensions abated somewhat.

Earlier this month, WTI crude reached its lowest level of the year during a global market sell-off. However, rising tensions in the Middle East provided some support, with concerns over potential disruptions in oil supply driving WTI up by $6 in less than a week. The price spike was further fueled when the US deployed additional troops to the region, pushing WTI closer to $80, but that ended and today WTI Oil dipped just below $73 for a while.

WTI Crude Oil Chart Daily – Oil is Unchanged Today After the $1.5 Fall

Despite this, the 200-day SMA (purple) acted as a resistance point, leading to a sharp drop in crude oil prices last week. This week’s losses have been more gradual as the market anticipates tomorrow’s PMI manufacturing and services reports from around the globe, with additional focus on Jerome Powell’s upcoming speech at the Jackson Hole Symposium on Friday.

EIA Weekly Crude Oil Inventories:

• • Crude oil: -4,649K barrels (vs. -2,672K expected, prior: +1,357K).

• Gasoline Inventories:

  • -1,606K barrels (vs. -933K expected).

• Distillates Inventories:

  • -3,312K barrels (vs. -215K expected).

• Refinery Utilization:

  • +0.8% (vs. +0.3% expected).

• Production:

  • 13.4 million barrels per day (mbpd) (vs. 13.3 mbpd prior).

API Data from Late Yesterday:

• Crude: +347K barrels.
• Gasoline: -1,043K barrels.
• Distillates: -2,247K barrels.

Hopes for an Israeli cease-fire in Gaza is adding to the downward pressure on oil prices across the Middle East. U.S. Secretary of State Antony Blinken recently concluded a tour of the region aimed at negotiating a cease-fire in Gaza. Expectations are rising for a U.S.-backed plan that could bring both parties in the conflict closer to a resolution, alongside efforts from Egypt and Qatar.

US WTI Oil Live Chart