- DOE inventories: -2.2M vs -0.2M exp and 6.2M prior
- Oil makes new 3 1/2 high at 77.42
- Oil.WTI moves above $71
It’s been a wild ride in the oil markets over the last 24 hours with prices surging higher after the US announced that they would pull out of the Iranian nuclear deal. The weekly DOE inventory reports from the US are normally the biggest movers for the oil market but they have understandably taken a back seat due to the developments in the Middle East.
Conflicting news reports ahead of the announcement saw some wild swings in the market, with oil plummeting on what proved to be an erroneous story from CNN that the US would in fact not pull out of the deal, before price recovered on a New York Times piece which quoted French president Macron who said Trump had told him he will withdraw. When confirmation came from the US president almost all these losses were recouped and the latest inventory data from the US - which showed a drop of 1.9M barrels in the past week - boosted the market further.
Oil has experienced several sharp moves in the past 24 hours with conflicting reports on the the US decision to withdraw from the deal, Trump’s announcement and both API and DOE inventories impacting the market. Source: xStation
Turing our attention to the DOE release, it looks like more good news for Oil bulls, with the headline reading showing a drop of 2.2M after a large build last time out of +6.2M. The negative reading is below both the expected -0.2M and last night’s API figure (-1.9M) so overall it represents a pretty positive number. There were also large drops in Gasoline (-2.1M) and Distillates (-3.8M) although production did rise once more, this time by 0.8% to 10.70m bpd.
A look at the overall report reveals another drop in the total inventories and Distillates although crude production increased once more. Source: Bloomberg, Saxo Bank
The initial reaction saw both Oil and Oil.WTI both rise to new 3 1/2 year highs, above the $77 and $71 mark respectively. There has since been a bit of selling back in what is quite choppy trade but the market remains in a clear uptrend and barring any reversal signals could continue to push higher.
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