Oil in free-fall after data
According to the US Energy Information Administration (EIA) data, published earlier today, US crude oil inventories decreased by 5.2 Mb in the week ending June 4. Market estimates were about a 2 Mb decrease. Yesterday we had the American Petroleum Institute (API) report as well. According to API data, the private sector saw a 2.1Mb decline, but it was less than 3.576Mb of market estimates.
However, even though inventories decrease almost 3.2Mb more than estimates, and it must be positive for the Oil market, it is falling sharply. Let's go and review more details to understand what happened.
"US crude oil refinery inputs averaged 15.9 million barrels per day during the week ending June 4, 2021, which was 327,000 barrels per day more than the previous week's average."
"US crude oil imports averaged 6.6 million barrels per day last week, increased by 1.0 million barrels per day from the previous week."
"Total products supplied over the last four-week period averaged 19.0 million barrels a day, up by 16.7% from the same period last year."
Gasoline supply increased by 7Mb, and distillate inventories rose by 4.4 million barrels for the same period, compared with 1M and 400K respectively estimates for each of them.
Also, the EIA data shows that last week Cushing stocks got 200Kb more Oil.
Data say that despite the main number of inventories, subcategories have been raised; that's why Oil prices could not use the momentum and gain more. However, it touched the highest level since 2918, before the decline.
But for next weeks, as "Refineries are running flat out to build inventories ahead of summer driving season," economist Adam Button said in a post on ForexLive. "There is already talk of heavy traffic on the roads." Also, the EIA report showing refinery runs rose 2.6 percentage points to 91.3% last week, which is the first time over 90% for months.
WTI technical overview
Technically in one hour chart, it is still in a clear uptrend, above the main MA lines, OBV line, and Parabolic SAR dost, while MACD also supports the trend. $69.30 is the pivot point, and despite the free fall of the last hours, it is still trading above this level. First support at $68.60 is a strong signal for uptrend while breathing above first resistance at 70.40 can open the doors for higher numbers.
