Yahoo Finance Oil Price Fundamental Daily Forecast – Market Surges After API Reports Surprise Crude Oil Draw
U.S. West Texas Intermediate and international-benchmark Brent crude oil are surging Wednesday after a private industry report showed a drop in U.S. crude inventories. The move was strong enough to take out last week’s high while erasing two days of losses.
At 1222 GMT, June WTI crude oil is trading $67.75, up $1.24 or +1.86% and June Brent crude oil is at $72.75, up $1.17 or +1.63%.
According to the American Petroleum Institute, U.S. crude inventories fell by 1 million barrels last week, to 428 million barrels. The data also showed a decline of nearly 2.5 million barrels of gasoline stockpiles during the week-ending April 13, with inventories of distillates falling by 854,000 barrels during the same time period.
On Tuesday, prices fell on profit-taking, a stronger U.S. Dollar and worries about increasing U.S. production ahead of Wednesday’s U.S. Energy Information Administration’s weekly inventories data.
Today’s EIA report, scheduled to be released at 1430 GMT, is likely to trigger a volatile reaction since analysts forecast a rise of 625,000 barrels of crude stockpiles.
Meanwhile, the forecast also calls for a draw of 1.9 million barrels for gasoline and 1.6 million for distillates.
We’re looking at the possibility of a two-sided trade because the EIA report calls for a build in crude stocks while the API report showed a drawdown. WTI and Brent crude oil could extend their gains if the EIA report shows a decline in crude inventories rather than an increase.
Furthermore, a bigger-than-expected draw in gasoline and distillates will also underpin prices.
Additionally, the markets remain on edge because of lingering concerns over a possible escalation of military activity in Syria.
This article was originally posted on FX Empire
