Yahoo Finance Oil Price Fundamental Daily Forecast – API Reports Massive Gasoline Inventories Build
U.S. West Texas Intermediate crude oil and internationally-favored Brent crude oil finished higher on Tuesday on speculation that the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA) weekly reports will show a drop in U.S. crude inventories.
January WTI crude oil settled at $57.62, up $0.15 or +0.26% and February Brent crude oil closed at $62.86, up $0.41 or +0.66%.
Traders expect data from the API and EIA to show crude stocks fell 3.5 million barrels last week.
Forecast
Crude oil futures are trading flat to lower early Tuesday after a bearish private industry report drove prices lower on the opening.
Late Monday, the American Petroleum Institute (API) reported a large draw of 5.481 million barrels of United States crude oil inventories for the week-ending December 1. Traders were looking for a draw of about 3.5 million barrels.
Gasoline inventories disappointed bullish traders with a massive build during the week-ending December 1. The API report showed an increase of 9.196 million barrels, compared to forecasts of a much smaller 1.145-million-barrel build.
Distillate inventories also saw a build this week, rising 4.259-million barrels, against a forecast of a 548,000-barrel build.
Inventories at the Cushing, Oklahoma futures hub decreased by 1.951-million barrels this week.
On paper the report was mixed with the crude oil number bullish and the fuel numbers bearish. The difference in the numbers raises uncertainty ahead of Wednesday’s EIA inventories reports which likely means we’ll see selling pressure early Wednesday.
According to traders, the EIA report is expected to show a draw of 3.2 million barrels. However, this potentially supportive number is likely to be offset by a build in gasoline and distillates.
A smaller than expected build in the gasoline and distillate numbers could be supportive for prices.
For WTI crude, the key zone to watch is $57.03 to $56.55. Look out to the downside if this area fails as support. Overtaking $58.17 could trigger an acceleration to the upside.
This article was originally posted on FX Empire
