Crude Poised to Test Resistance Following Robust Inventory Draw

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Crude oil prices moved to the top end of the trading range and are poised to break higher given another draw in crude oil inventories. Despite U.S. inventories remaining at record highs, the trajectory of the declines continue to accelerate, which could push crude prices out of their current range.

Crude oil inventories continue to decline, but distillates remain stable given modest demand. According to the Energy Information Administration, U.S. commercial crude oil inventories decreased by 4.9 million barrels from the previous week. Gasoline inventories increased by 0.7 million barrels last week, and are in the upper half of the average range. Distillate fuel inventories increased by 1.8 million barrels last week and are in the middle of the average range for this time of year.

Demand for gasoline remains robust, as does total demand for products. In the EIA report it showed that total product demand over the last four-week period averaged over 19.8 million barrels per day, up by 7.2% from the same period last year. Over the last four weeks, gasoline demand averaged about 9.4 million barrels per day, up by 4.5% from the same period last year. Distillate fuel demand averaged over 3.8 million barrels per day over the last four weeks, down by 0.9% from the same period last year. Jet fuel demand is up 7.4% compared to the same four-week period last year.

Crude oil prices have been stuck in a tight range for the past two months. A close above horizontal trend line resistance at 62.70 is what is needed for a breakout. Support is seen near the 50-day moving average at $59.20.

The post Crude Poised to Test Resistance Following Robust Inventory Draw appeared first on Forex Circles.

Source:: Crude Poised to Test Resistance Following Robust Inventory Draw

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