WTI Crude Oil and Brent Crude Oil

Oil Price Fundamental Daily Forecast – Mixed Gasoline Inventory Numbers Fueling Trader Indecision

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower on Thursday as bullish traders take a breather following the release of mixed inventories reports on Tuesday and Wednesday.

Today’s move doesn’t suggest topping action, but rather the potential shifting in sentiment from aggressive traders chasing prices higher to more conservative traders looking for a pullback into a value area.

At 13:56 GMT, June WTI crude oil futures are trading $65.09, down $0.54 or -0.82% and July Brent crude oil is at $68.51, down $0.45 or -0.65%.

Earlier in the week, traders expressed concerns over the pandemic in India and its potential impact on global demand, however, since then these worries have been offset by optimism fueled by the lifting of lockdowns in the United States and parts of Europe.

American Petroleum Institute Weekly Inventories Report

The American Petroleum Institute (API) reported late Tuesday that U.S. crude supplies fell by 7.7 million barrels for the week ended April 30. Ahead of the report, traders were pricing in at 3.9 million barrel draw.

The API also reported that gasoline stockpiles fell by 5.3 million barrels versus pre-report estimates of a 500,000 barrel drawdown.

Meanwhile, distillate inventories declined by nearly 3.5 million barrels. Traders were looking for a 1.6 million barrel drawdown.

Energy Information Administration Weekly Inventories Report

According to the U.S. Energy Information Administration (EIA), crude inventories fell by 8 million barrels in the week to April 30 to 485.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.3 million-barrel drop.

U.S. gasoline stocks rose by 737,000 barrels in the week to 235.8 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 652,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, fell by 2.9 million barrels in the week to 136.2 million barrels, versus expectations for a 1.1 million-barrel drop, the EIA data showed.

Daily Forecast

The mixed inventories reports may have given buyers a reason to pause. Both the API and EIA reports drawdowns in crude oil and distillate inventories, but the gasoline inventories data yielded mixed results. The API reported a large drawdown, but the EIA report showed an unexpected rise in inventories.

As we approach summer driving season in the U.S., traders will shift their focus to the gasoline numbers. It’s still a little early in the season so the gasoline data wasn’t that big of a deal. However, between May 31 and September 5, bullish traders will be expecting to see stronger demand for gasoline.

For a look at all of today’s economic events, check out our economic calendar.

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.