- WTI has turned lower in recent trading, hitting fresh daily lows despite a bullish inventory report.
- Perhaps the report has been interpreted to increase the likelihood that the Biden administration will take advantage of the SPR.
The previous month’s US benchmark futures for Light Sweet Crude, West Texas Intermediary or WTI, they have traded lower in recent trading. WTI has spiked to fresh daily lows below the $ 79.50 level and is now considering a test of the previous weekly lows in the $ 79.30 zone. If that level breaks, there may be a run to monthly lows at $ 78.30.
A more optimistic than expected US crude oil inventory report from the EIA recently released at 15.30 GMT failed to substantially alter the mood in crude oil markets. For reference; Crude oil core stocks posted a surprise drop of 2.1 million barrels in the week ending November 12 against expectations of an accumulation of just under 1.4 million barrels. API inventory data released Tuesday pointed to a weekly build of 655,000 barrels. EIA data showed that gasoline inventories fell 700,000 barrels (versus forecast consumption of 575,000 barrels). Distillate stocks registered an extraction of 824,000 barrels (compared to the forecast of an extraction of 1,229 thousand barrels).
Typically, a bullish inventory report from the EIA would trigger a spike in crude oil prices, as it suggests stronger-than-expected demand for oil and its products. But analysts have argued that a larger-than-expected inventory draw at this time could encourage the Biden administration to release crude oil reserves from the U.S. Strategic Petroleum Reserve.The administration has been threatening to do so since the early 1990s. month when OPEC + refused to increase production by more than 400,000 barrels a day in December, given its concerns about high gas and energy prices in the United States. According to the Chinese press, the US administration has asked China to release crude oil reserves as part of its talks with the US on economic cooperation. US lawmakers are divided on whether or not to turn to the SPR, and House Majority Leader Steny Hoyer disagreed with Senate Majority Leader Chuck Schumer’s call for the SPR is active during the weekend.
Technical levels
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