WTI retraces EIA-inspired spike, looks to settle below $56
|- EIA says crude oil inventories fell by 10 million barrels in US.
- Fears over global economic slowdown continue to weigh on crude oil.
- Brent oil clings to gains above $60 handle.
After posting strong gains on Tuesday, crude oil prices stretched higher earlier today. With the weekly crude oil data published by the US Energy Information Administration (EIA) showing a sharp fall in the US crude oil inventories, crude oil prices extended their rally. The barrel of West Texas Intermediate touched its highest level in a week $56.70 and the barrel of Brent rose to $60.97.
In its weekly publication, the EIA said crude oil inventories fell by 10 million barrels per day, compared with analysts' estimate for a draw of 2.1 million barrels, and provided a strong boost to crude oil prices.
Risk aversion hurts crude oil
However, concerns over a global economic slowdown and its potential negative impact on the energy demand outlook continue to make it difficult for crude oil to continue to gather strength.
After inverting with the 3-month US Treasury bond yield for the first time in 12 years on Tuesday, the 30-year Treasury bond yield extended its slide and touched a fresh record low today, reviving fears over a recession in the US and forcing investors to stay away from risk-sensitive assets. Furthermore, the data published from Germany on Tuesday confirmed the economic contraction in the second quarter.
As of writing, the WTI was trading at $55.57, losing 0.13% on the day while the barrel of Brent was up 0.4% on the day at $60.30.
Technical levels
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.