WTI jumps back to $53.00 following bullish EIA inventory numbers

WTI is back in the green after a bullish US EIA weekly inventory report.
Prices bounced from around $52.00 to above $53.00 following the data.

Joel Frank Independent Analyst

Oil prices are back in the green following bullish weekly US EIA inventory numbers; following the release, WTI has jumped back to the $53.00 level from previous session lows around $52.00 and is now up nearly 50 cents or 0.8% on the day. Oil markets had previously been trading in the red in tandem with downside being seen in global stock markets and upside being seen in the US dollar.

Looking at WTI over a longer time horizon, it hasn’t really moved much at all over the past three weeks; during this time period, price action for the most part has stayed above the $52.00 level but has been unable to break above $54.00 level. “Oil continues consolidating” commented OANDA analyst Jeffrey Halley, although he suggested that given "the Saudi Arabian cuts, OPEC+ compliance above 85% and an insatiable demand from Asia… oil has seen its cyclical lows for 2021.”

Bullish US EIA numbers

A much larger than expected draw in headline official crude oil inventories triggered upside in the crude oil complex; the latest US EIA weekly inventory numbers showed stocks dropping 9.91M barrels versus expectations for a small 430K barrel build, implying that demand in the week ending on the 18^th of January was significantly stronger than anticipated. Distillate stocks also saw a larger than anticipated drop off of 815K barrels and draws were also seen in Cushing stocks. However, Gasoline inventories rose by 2.47M, larger than expectations for a build of 1.764M, but not by enough to distract from the much larger than expected headline draw.

WTI four hour chart

Author

Joel Frank

Independent Analyst

Joel Frank is an economics graduate from the University of Birmingham and has worked as a full-time financial market analyst since 2018, specialising in the coverage of how developments in the global economy impact financial asset

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