WTI slumps below $58 after EIA reports smaller-than-expected draw in crude oil stocks
|- EIA says crude oil inventories in the U.S. decreased by 0.3 million barrels.
- Trade war worries continue to hurt commodities.
- Russia's oil output decreases in May.
Crude oil prices came under a renewed selling pressure in the NA session after the weekly data published by the U.S. Energy Administration Information showed a smaller than expected draw in stockpiles. As of writing, the barrel of West Texas Intermediate was down 2% on a daily basis at $57.90.
The EIA today said crude oil inventories decreased by 0.3 million barrels during the week ending May 24 compared to analysts' forecast for a decrease of 0.8 million barrels.
Earlier in the day, Reuters reported that Russia's oil output fell to 11.12 million barrels per day on average for May 1-29 from 11.23 million barrels in April to reflect the negative impact of the contamination in the Druzhba pipeline and helped the WTI recover toward the $60 mark.
Nevertheless, the overreaction to the EIA data today suggests that corrections remain technical and investors are looking for the next opportunity to resume the selloff especially with none of the latest headlines helping the U.S.-China trade fears ease and improve the demand outlook. "An escalating U.S.-China trade war represents a risk to oil markets," Bernstein Energy told Reuters on Thursday after a senior Chinese diplomat accused the Trump administration of "naked economic terrorism."
Technical levels to consider
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