- API showed an unexpected build in oil stocks
- Today’s DoE report crucial for a further scenario in WTI price action
The American Petroleum Institute (API) revealed quite a shocking report on oil stocks as it showed a build by 2.75 million barrels while the consensus has indicated a decline by 2.7 million barrels. In the aftermath of the release oil prices erased almost all their prior gains.
Moreover, the API showed that gasoline stocks picked up by 1.794 million barrels as well. In this case expectations pointed to a draw by -1.15 million barrels. The sole upbeat figure was a decline of oil stocks in Cushing by -0.833 million barrels. All in all, that report isn’t reassuring for oil bulls as we’re heading for the DoE publication scheduled to be released later in the day.
On the other hand, let us remind that the API missed the DoE’s report last week as the former showed a draw while the report published one day later saw an unexpected build. Hence, even as yesterday’s figures don’t look favorably for oil bulls, it could change if the DoE sees a draw. The release of the US Department of Energy will be even more important because another pick-up in oil stocks could herald that a seasonal increase of demand for fuel in the US has failed to prop up a decline in stocks.
Seasonal changes in US oil stocks according to the US DoE. The recent bump could be an ominous point if it’s confirmed by today’s release. Source: Bloomberg
WTI oil prices remain within an upward channel, a further scenario will depend on figures provided by the DoE and the FED’s meeting as well. If price breaks through a resistance placed at $46.75 that could provide a continuation of the upside. Another more important resistance that bulls could run into is located at around $48. After all, a breakout of a downward limit of the channel could constitute an interesting selling opportunity.
Oil prices remain within an upward channel, if price breaks through a resistance placed at $46.75 that could provide a continuation of the upside. Source: xStation5