Crude oil will be taking note of the DOE inventory report on Wednesday, as the API survey showed extremely bearish stock movements. Gold seems to have resumed its long-term uptrend.
Commodities – Energy
Crude Oil Inventories in Focus
Crude Oil (WTI) - $75.55 // -$0.22 // -0.29%
Commentary: Crude oil rallied $0.53, or 0.70%, on Tuesday, breaking a five session losing streak. The advance, however, was quite tame relative to both last week’s decline and the 1.2% rally in equity markets. The oil market may be finally be acknowledging that fact that supply remains abundant, with inventories in the U.S. at 10-year highs. If the API survey is any indication, the DOE report tomorrow will show inventories continuing to surge counter-seasonally (API: Crude +5.86 million, Gasoline +2 million, Distillate +2 million). There have been reports by industry sources that floating storage has been drawing down rapidly, which accounts for much of the build onshore, but even so, the overall supply-demand balance remains very comfortable per the figures released by the International Agency. Per the IEA, OPEC production is above levels necessary to keep inventories stable for this year and next.
Technical Outlook: Prices appear to have found near-term support at the bottom of a rising channel established since late May, now at $75.09. A rebound sees initial resistance at $79.38, with a break beyond that exposing $82.64.
