WTI turns lower after surprise crude stocks build
News of a surprise inventories build in the US has caused oil prices to give up earlier gains and turn lower.
The EIA US weekly crude oil inventories came in at +3591K vs -2850K expected and -2547K prior.
The 3.6-million-barrel build suggests weaker demand despite hopes that inventories would draw down more meaningfully due to the US driving season. However, gasoline stocks also rose, coming in at +2654K vs -1024K expected, while the refinery utilization fell to -1.3% vs +0.1% expected.
As a result, crude oil prices turned lower on the session to take out the lows of the past several days.
The key support to watch is at $80.00 – if it breaks this level decisively now then we could see some follow-up technical selling towards $79.00 next.
However, if instead oil prices rise to hit a new high on the session, then this would invalidate any bearish signals we may have seen today.
So, watch the closing prices attentively.
By Fawad Razaqzada, market analyst at FOREX.com
The EIA US weekly crude oil inventories came in at +3591K vs -2850K expected and -2547K prior.
The 3.6-million-barrel build suggests weaker demand despite hopes that inventories would draw down more meaningfully due to the US driving season. However, gasoline stocks also rose, coming in at +2654K vs -1024K expected, while the refinery utilization fell to -1.3% vs +0.1% expected.
As a result, crude oil prices turned lower on the session to take out the lows of the past several days.
The key support to watch is at $80.00 – if it breaks this level decisively now then we could see some follow-up technical selling towards $79.00 next.
However, if instead oil prices rise to hit a new high on the session, then this would invalidate any bearish signals we may have seen today.
So, watch the closing prices attentively.
By Fawad Razaqzada, market analyst at FOREX.com