- DOE inventories: -7.4M vs -5.2M Exp AND -4.6M prior
- US oil production rises (+0.3%)
- Brent Oil remains close to a 2 1/2 year high
The weekly DOE Oil inventories have shown yet another large drop with the immediate reaction in the crude markets being a rise with Brent moving back above the $68 handle to trade not far from its highest level since the summer of 2015.
Brent Oil has risen after the release and is not far from its highest level since the summer of 2015, made earlier today at 68.27. Source: xStation
The headline reading of -7.4M was the biggest drop since August and marks a 7th straight weekly decline in US stock piles. With a consensus forecast of -5.2M and last night’s API coming in at -5.0M it is clear that this is a larger than expected drop and therefore could be seen as supportive of the oil price.
However, a closer look at the DOE report reveals some interesting developments in some of the components which may explain the relatively muted market reaction to what should, on the face of it, be seen as a positive for crude. A reading for the Distillate inventories of +8.9M was way above the +0.5M expected and it was a similar story for Gasoline which rose by 4.8M compared to consensus forecasts for a reading of +2.0M. In addition there was a 0.3% rise in weekly US oil production which has increased once more, this time by 0.3%, to reach yet another record level.
Brent Oil has moved back close to the highs above the $69 handle. This could be a possible resistance zone. Source: xStation
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