WTI eases towards $49 despite bigger-than-expected draw in US crude inventories
Crude oil prices failed to gain traction in the post-settlement trade on Tuesday even after the API reported a larger-than-expected draw in U.S. crude oil inventories. As of writing, the barrel of West Texas Intermediate was trading at $49.05, losing 0.7% on the day.
Although crude oil stocks in the U.S. fell by 7.8 million barrels to 478.4 million, further details of the API report showed that refinery crude runs rose by 91,000 barrels per day while crude imports fell by 30,000 barrels per day, signaling towards rising production levels in the U.S.
On Wednesday, the U.S. Energy Information Administration will release its stock report as well, which is expected to decrease by 2.8 million barrels for the week ending August 4. Earlier in the day, the EIA released its forecast report, which included upward revisions to 2017 and 2018 oil production forecasts, not allowing WTI to gather momentum despite some optimistic headlines from the recent OPEC meeting in Abu Dhabi.
In the meantime, the greenback rallied on the back of today's upbeat macro data from the U.S., increasing the pressure on the WTI. As of writing, the US Dollar Index was at 93.50, up 0.2% on the day.
Technical outlook
The barrel of WTI may need to make a daily close above $50 (psychological level) to start a healthy recovery movement. $51.05 and $52 (May 25 high) could be seen as next targets above that level. On the downside, supports align at $47.85 (Jul. 26 low), $46.40 (Jul. 25 low) and $45 (psychological level).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
