Crude oil inventories: -8.6M vs +3.0M exp
Drawdown comes after API drop (-4.2M) last night
Sparks rally in Oil.WTI back above $57
The weekly crude oil inventories have shown the largest drop in 7 months, and added more fuel to the recovery rally following Monday’s large declines. Compared to an expected build of 2.8M and a prior reading of +3.7M today’s number is clearly a positive beat for the price of crude. Last night’s API saw a short, sharp move higher after an unexpected drop of 4.2M, but today’s more widely viewed figure has outdone that and provided a further boost to the market.
Oil.WTI jumped on last night’s API drawdown and extended the rally after this afternoon’s EIA inventory release. Price is now back above the $57 handle and up by almost 200 ticks, or $2, in less than 24 hours. Source: xStation
In addition to the headline reading, the following subcomponent inventory numbers of the report were also released:
Gasoline: -1.9M vs -1.3M exp
Distillates: -0.3M vs -2.0M exp
Production: 12.1M vs 12.0M prior
The gasoline and distillates numbers are fairly mixed here really with the US production once more increasing to a new record high of 12.1M. This increase in production is no doubt negative for the price of Oil, but the market appears to be looking through this for now and focusing more on the large drawdown in the headline inventory number.
The longer term head and shoulders remains in play for Oil.WTI with 55.00 now seen as potentially key support and highs around 57.80 resistance. Source: xStation