Crude oil Rebounds From Lows as Draw in Inventory Offsets Dollar Strength


Crude prices gyrated around and unchanged price level on Thursday following the release of the Energy Information Administration’s inventory report which was delay due to the Memorial Day Holiday. Crude oil inventories drew down for the 3rd consecutive week, which will likely put a floor under prices. The dollar has also played a role in the recent selloff, as the dollar gain ground, commodities priced in dollars usually underperform.

The dollar’s breakout against the yen continued, with the greenback taking out the 2007 high near 124.15. The strength in the greenback began to weigh on crude oil prices, driving prices down prior to the release of the DOE inventory estimate. Prices rebounded in afternoon trade but remained under pressure.

An inventory draw continued to buoy price action. According to the Department of Energy, U.S. commercial crude oil inventories decreased by 2.8 million barrels from the previous week. At 479.4 million barrels, U.S. crude oil inventories are at the highest level for this time of year in at least the last 80 years. Gasoline inventories decreased by 3.3 million barrels last week, but are near the upper limit of the average range. Distillate fuel inventories increased by 1.1 million barrels last week but are in the lower half of the average range for this time of year.

Total demand for products over the last four-week period averaged about 19.8 million barrels per day, up by 3.5% from the same period last year. Over the last four weeks, gasoline demand averaged over 9.2 million barrels per day, up by 1.6% from the same period last year. Distillate fuel demand averaged over 4.1 million barrels per day over the last four weeks, down by 0.4% from the same period last year. Jet fuel demand is up 5.0% compared to the same four-week period last year.

Technically, crude prices are under pressure, with resistance seen near the 10-day moving average at $58.89. Momentum is negative with the MACD (moving average convergence divergence) index printing in negative territory with a downward sloping trajectory.

The post Crude oil Rebounds From Lows as Draw in Inventory Offsets Dollar Strength appeared first on Forex Circles.

Source:: Crude oil Rebounds From Lows as Draw in Inventory Offsets Dollar Strength

About the Author
ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC. Our mission is to maximize the value our clients derive from their most precious commodity, "Time"! By offering advanced and innovative services, optimal customer care and perpetual devotion to our clients, we will ensure that their individual needs are always met as markets continue to evolve over time. Visit ForexTime to learn more [space height="20"] [social type="facebook"][/social] [social type="twitter"][/social] [social type="google-plus"][/social] [social type="youtube"][/social]

Related Posts

Leave a Reply