Russian Gas cut is getting more serious
After steady trading in the first hours of Wednesday, oil prices started to regain yesterday's losses. Last night American Petroleum Institute released its weekly report, and according to that report, US crude oil inventories fell by -4.037 Mb, compared with -1.121 Mb expectations and a 1.860 Mb increase of week ago. According to the API report, US gasoline inventories also fell by 1.1 million barrels, compared with expectations for a 3.5 million barrels increase. While this report was going to push the price higher, another report about lower demand in the US market offset its effects.
On top of that, the official data from the Energy Information Administration later on Wednesday show that US crude oil stockpiles dropped by 4.5 million barrels in the week ended July 22th. This sharp fall in inventories was reported after US export surged to an all-time high last week.
This mass in the Oil market coincided with decreasing the Nord Stream 1 pipeline gas export to Germany to a fifth of capacity. Russia's Gazprom (MCX: GAZP) excuses technical problems. With these decreases in export, it sounds that the latest EU members' decisions to decrease the demand also can not help the market to rebalance, especially knowing that after an earlier fall, US gasoline demand rebounded by 8.5% week on week, according to the data.
Now, while market participants are waiting for a significant rate hike by FED, that can increase concerns about the demand outlook and would probably boost the US dollar, decrease the energy demand push the Oil prices lower; still, WTI shows an almost 1% increase above $96 and Brent Oil above $100, gaining almost 0.6% daily base.
From the technical point of view, the WTI downtrend paused around 95 US Dollars, and while the price is getting to rebound, we can see higher volume as well, which can support the bulls in the Daily timeframe.
