The US EIA reported another large build in US crude oil inventories but it shouldn’t have come as a surprise after yesterday’s API data.
Crude oil inventories rose 8874K compared to the consensus estimate of +4000K but a quick 30-cent drop to a session low of $44.52 was immediately wiped out and prices continued higher to $45.20. WTI is still down $1.02 on the day.
Overall supply is at the highest ever in records dating back to 1982. But the build shouldn’t have come as a big surprise because API data showed a 12.7m barrel build. If anything, the market was probably priced for something worse and that helps to explain the rebound in crude.
What’s Next?
I like the downside in crude and I think the little pop is some profit taking after the API data. Overall, crude is struggling to hold onto gains and that it hasn’t been able to stage any kind of bounce over the past three weeks despite a +50% plunge in the past few months argues for more downside.
WTI crude
