Oil Price Fundamental Daily Forecast – Traders Looking for EIA Report to Show 2.1 Million Barrel Drawdown

James Hyerczyk
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U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower shortly after the New York opening and ahead of today’s government inventories report. The fundamentals are bullish so the price action suggests profit-taking may be the reason behind the weakness.

Earlier in the session, the markets tested more than two-year highs, supported by a recovery in demand from the pandemic and a drop in U.S. crude inventories.

At 13:17 GMT, September WTI crude oil futures are trading $71.20, up $0.06 or +0.08%. This is down from a high of $71.76. September Brent crude oil is at $73.44, up $0.14 or +0.19%. The intraday high is $74.00.

American Petroleum Institute Weekly Inventories Report

The API on Tuesday reported a draw in crude oil inventories of 8.537-million barrels for the week-ending June 11. Analysts had predicted a much smaller draw of 3.290 million barrels for the week.

The API also reported a build in gasoline inventories of 2.852 million barrels for the week ending June 11 – on top of the previous week’s 2.405-million barrel build. Analysts had expected a draw of 614,000-barrel for the week.

Distillate stocks saw an increase in inventories this week of 1.956 million barrels for the week, on top of last week’s 3.752-million-barrel increase.

Daily Forecast

The rise in API gasoline inventories for the week-ending June 11 didn’t rattle bullish traders like it did last week. This suggests that investors have accepted the build as a short-term event and that eventually there will be enough summer driving demand to drive down supply.

Later today at 14:30 GMT, investors will have the opportunity to react to the latest inventories figures from the Energy Information Administration (EIA). The government report is expected to show a 2.1 million-barrel draw in crude oil supply.

Bullish traders are hoping the fuel inventories numbers show a drawdown. A drop in gasoline supply could spike crude oil prices higher.

The wildcard at this time is the U.S.-Iran nuclear deal. If a deal is reached, it may include the lifting of sanctions on Iranian oil exports. This could be a short-term bearish development especially since prices may be technically overbought.

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

This article was originally posted on FX Empire

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