Oil ends 4-day rally, drops ahead of EIA inventory report
Oil prices on both sides of the Atlantic extends its overnight retreat after the API stockpiles report failed to impress markets, and thus, capped further upside.
Oil awaits EIA report
Currently, both crude benchmarks move-off multi-week tops, with Brent down -0.83% at $ 48.80, while WTI drops -0.62% to 46.29 levels. Oil prices reverse a part of this week’s vertical rise and keep losses this session, as the sentiment was dampened by unexpected rise in gasoline stocks, which overshadowed a bigger-than expected fall in the crude supplies, as reflected by the API report.
Moreover, broad based US dollar rebound after the recent slump also weighs down on the black gold. A stronger US dollar makes oil expensive for the buyer in foreign currencies.
However, the losses are expected to remain limited, as hopes that OPEC will revive talks on freezing oil output levels at its meeting next month, continue to support the prices.
Attention shifts towards the highly influential Energy Information Administration (EIA) due later on the day, with markets predicting a rise of about 300,000 barrels in weekly US crude stockpiles. Gasoline stocks are expected to shrink by about 1.64 million barrels.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
