Oil off the lows after mixed EIA inventory report
|The EIA crude oil inventory report came close to matching the API report, also more than doubling the high end of the economists’ forecast range. The build of 9.3 million barrels of crude initially saw oil prices spike lower towards the session lows but has now quickly erased most of today’s earlier decline.
It seems Brexit and trade war optimism, along with a decent start to earnings season is alleviating some demand growth concerns and helping traders ignore the bearish headline surge with stockpiles. Crude production stayed at the record high of 12.6 million barrels for a second consecutive week. The report was not completely bearish as both refinery maintenance accelerated some output and as fuel supplies declined, bringing down the overall petroleum inventories.
Some of this huge build was expected as refiners get ready for the IMO rules that kick in at the start of the year. The coming weeks could see a drop in production as we enter a key maintenance period for refiners.
Technical traders are starting to turn bullish on West Texas Intermediate crude as it has started to make higher lows and appears to have major support around the $52 a barrel level. If we see more constructive comments leading up to next month’s Xi-Trump meeting at the APEC summit, we could see WTI make a run to the $57.00 region.
The Canadian dollar also extended its gains against the greenback after oil pared some of its earlier losses. USD/CAD is now at the lowest level since July 31st and could be on the verge of breaking out even further.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.