WTI under pressure after API announces surprise build in US crude stocks

Eren Sengezer FXStreet

Crude oil came under a broad-based selling pressure in the post-settlement trade on Tuesday after American Petroleum Institute's stock report revealed a surprise build in U.S. crude stocks. The barrel of West Texas Intermediate quickly lost 0.7$ after the release and is now trading at $48.75, losing 2.75% on the day.

"Crude inventories rose by 1.8 million barrels in the week ending July 28 to 488.8 million, compared with analysts' expectations for a decrease of 3 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 2.6 million barrels, and refinery crude runs rose by 142,000 barrels per day, API said," Reuters reported.

On Wednesday, investors will look at the EIA's stock report for fresh clues on crude oil production in the U.S. After dropping by 7.208 million barrels in the previous week, crude oil stocks are expected to drop further by 2.9 million barrels for the week ending July 28. Today's report could ramp up the expectations for a smaller draw or even an increase in crude inventories, which could put more pressure on the barrel of WTI.

In the meantime, the fact that the latest report showed that output by the Organization of the Petroleum Exporting Countries (OPEC) rose in July despite the cartel's agreement to reduce production suggest that the high oil supply is likely to continue to weigh on the prices.

Technical outlook

$50 (psychological level) remains as a critical hurdle for the barrel of WTI ahead of $51.05 ahead of $52 (May 25 high). On the downside, supports could be seen 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.

AUD/USD falls to near 0.7100 after slipping below 50-day EMA

AUD/USD depreciates after registering minor gains in the previous day, trading around 0.7120 during the Asian hours. The technical analysis of the daily chart shows the pair consolidating sideways within a rectangle pattern, as neither bulls nor bears gain control. The AUD/USD pair is holding a slight bearish tone however as it sits beneath both the nine-day and 50-day EMAs.

160.00: USD/JPY back near intervention territory after upbeat US jobs report

US Nonfarm Payrolls beat expectations by a wide margin in May, with 172K jobs added. The US Dollar rebounds after the release, helping USD/JPY recover from its intraday lows. Warnings from Japanese authorities continue to limit upside potential near the 160.00 threshold.

Gold remains offered below $4,500 following US Payrolls

Gold prices trade with a bearish bias and still remain below the key $4,500 mark per troy ounce at the end of the week. The slighlty softer tone in the US Dollar alongside mixed US Treasury yields across the curve also keep the yellow metal’s downside somewhat contained.

Cardano hits five-year low even as Hoskinson clarifies "break" isn't an exit

Cardano (ADA) price is down 10% at press time on Friday, extending losses over 30% so far this week amid Charles Hoskinson's clarification that "break" isn't an exit.

Week ahead – Fed countdown begins amid US inflation data and geopolitical risks

Fed Chair Warsh’s first meeting approaches as key US inflation data could reshape expectations. Oil prices remain elevated as US-Iran talks continue; tariffs also return to the spotlight. ECB is expected to hike; will it be a one-off move or is July live?

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.