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Crude Oil Edges Higher Following Gasoline Inventory Draw
Posted On 22 Apr 2015
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Crude oil prices moved higher on Wednesday following the latest release of inventory estimates from the Department of Energy. Price action pierced through the March highs and this recent pause might begin to refresh. Although lower gasoline prices have boosted demand, distillate demand has slumped and is down year over year.
According to the Energy Information Administration, U.S. commercial crude oil inventories increased by 5.3 million barrels from the previous week. Analysts were expected a build of 3 million barrels. The American Petroleum Institute on Tuesday reported that crude supplies climbed 5.5 million barrels for the week ended April 17, which was more than double the 2.6 million-barrel increase forecast by analysts. Gasoline inventories decreased by 2.1 million barrels last week, but are above the upper limit of the average range. The trajectory continues to move lower and gasoline inventory are nearly back within the 5-year range.
Distillate fuel inventories increased by 0.4 million barrels last week and are in the middle of the average range for this time of year. Total commercial petroleum inventories increased by 9.2 million barrels last week.
On the demand front, total products demand over the last four-week period averaged 19.2 million barrels per day, up by 5.2% from the same period last year. Over the last four weeks, gasoline demand averaged over 9.0 million barrels per day, up by 4.0% from the same period last year. Distillate fuel demand averaged over 3.9 million barrels per day over the last four weeks, down by 0.2% from the same period last year. Jet fuel demand is up 12.2% compared to the same four-week period last year.
The technical picture shows crude oil prices closing above the March highs. Support is seen near the 10-day moving average at $54.74. Momentum is climbing as the MACD (moving average convergence divergence) index prints in positive territory with an upward sloping trajectory.
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