US EIA Crude Oil Inventories preview: Oil erases losses on broad inventory drawdown
Crude oil has erased yesterday’s losses and Brent is close to doing so as well after private oil inventories data yesterday showed a large draw.
WTI (SEP) has gained $0.40 (1%), although remains near the middle of its recent trading range at $42.14. Brent is $0.33 (0.7%) higher to trend just above $45.00. Both benchmarks had spiked to their second-highest levels since March yesterday in the wake of the latest data from the American Petroleum Institute.
Private data shows larger-than-expected oil, gasoline draws
API data released yesterday showed a drop in crude inventories of 4.4 million barrels during the week ending August 7th. Analysts had expected a drop of 2.875 million barrels.
The figures continue to point to strong demand recovery in the US, helping to counterbalance some of the downside pressure on crude as OPEC members begin scaling up production after cutting by record levels between May and July.
Further improving sentiment was a larger-than-expected draw from gasoline inventories. Stocks fell by 1.748 million barrels against expectations of a 674,000 decline.
US EIA Crude Oil Inventories forecasts
Forecasts for the US EIA Crude Oil Inventories report suggest a drop, but as we’ve seen previously both the direction and magnitude of the change often takes analysts by surprise. Predictions for the past four weeks’ worth of US EIA data have been way off the mark in terms of the size of the change, and wrong about the direction twice.
After the API data many traders will be expecting to see a similar decline in inventories when the EIA publishes its official figures.
As well as the latest inventories data, traders can also expect fundamental updates from today’s Monthly Oil Market Report published by OPEC, and tomorrow’s Oil Market Report from the International Energy Agency.