{"id":150890,"date":"2019-07-05T04:48:38","date_gmt":"2019-07-05T08:48:38","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=150890"},"modified":"2019-07-05T06:49:19","modified_gmt":"2019-07-05T10:49:19","slug":"us-crude-stores-fall-again-but-oil-fails-to-rally","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/07\/us-crude-stores-fall-again-but-oil-fails-to-rally\/","title":{"rendered":"US Crude Stores Fall Again, But Oil Fails To Rally"},"content":{"rendered":"
July 5, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Third Straight Weekly Fall in US Crude Stores<\/strong><\/h2>\n

Crude prices have softened a little today following an initial rally yesterday.<\/strong>\u00a0This was\u00a0in response to the latest industry report which showed a further drawdown in US crude stores. The Energy Information Administration\u2019s report, covering the week ending June 28th<\/sup>, showed that US crude stored fell by 1.1 million barrels.<\/p>\n

Despite being the third consecutive weekly drawdown now, the fall was less than the 3 million barrel decline the market was looking for. At the Cushing delivery hub in Oklahoma, crude stores actually rose by 625k barrels.<\/p>\n

Gasoline Down, Distillates Rise<\/strong><\/h2>\n

Elsewhere, the data showed that gasoline stocks were also down. Gasoline stocks fell 1.6 million barrels over the week. Again, however, this was below the expected 2.2 million barrel decline.<\/p>\n

Distillate stockpiles, which include diesel and heating oil, rose over the week, moving higher by 1.4 million barrels.\u00a0<\/strong>This was\u00a0in contrast to an expected 1 million barrel decline.<\/p>\n

US Crude Imports Rise<\/strong><\/h2>\n

US crude imports were higher again last week, rising 929k barrels to 7.7 million barrels per day.\u00a0<\/strong>This figure is above the recent four week average of 7.3 million barrels per day.<\/p>

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Meanwhile, US crude exports were lower over the week by 780k barrels, averaging 3 million barrels per day.<\/p>\n

Market Reacts To OPEC Meeting<\/strong><\/h2>\n

While the report is still bullish for crude, the surprise jump in imports blunted the expected drawdown in inventories.<\/strong>\u00a0This, in turn,\u00a0has subdued the upside reaction in the market. Indeed, oil has also seen a muted reaction to the other key driver this week which was the July OPEC meeting.<\/p>\n

The group had been widely expected to announce an extension to the cuts that have been in place since January.\u00a0The re-emergence of trade war tensions<\/strong>\u00a0between the US and China<\/a>, as well as surging US crude production over the year, have blunted the rally that had been going strong in oil.\u00a0<\/strong>This had led\u00a0to expectations of an OPEC extension.<\/p>\n

OPEC Extends by 9 Months<\/strong><\/h2>\n

While OPEC did indeed announce an extension to its production cuts,\u00a0the 9-month extension was longer than the market had been anticipating<\/strong>.<\/p>\n

OPEC designed it this way so that it would cover the low demand period over Q1 2020.<\/strong>\u00a0However, despite the news, crude was sharply lower in response. This raised questions about the market\u2019s conviction in OPEC\u2019s ability to drive prices higher.<\/p>\n

Demand Outlook Plaguing Oil Prices<\/strong><\/h2>\n

In terms of the negative reaction, which will no doubt be disappointing to OPEC, concerns around the demand outlook as well as over OPEC\u2019s ability to maintain obedience to cuts, are the likely drivers.<\/p>\n

Demand forecasts have been slashed by both the EIA and the IEA recently due to weak growth In China and India. Alongside this, surging US crude production is also weighing on the outlook.<\/strong><\/p>\n

OPEC has said<\/a>\u00a0that it will review its decision in December which could see the operation brought to an early finish, or even extended further.<\/p>\n

Technical Perspective<\/strong><\/h2>\n

\"us<\/a><\/p>\n

Oil prices continue to trade within the corrective bearish channel, for now, having recently found resistance at the 59.77 structural level. There, price also tested the channel top. 55.86 is holding as support for now, while below here, 54.27 is the next support. Bulls need to see a break above the 59.77 level to encourage fresh topside momentum and a resumption of the bullish move from 2018 lows.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Third Straight Weekly Fall in US Crude Stores Crude prices have softened a little today following an initial rally yesterday.\u00a0This was\u00a0in response to the latest industry report which showed a further drawdown in US crude stores. The Energy Information Administration\u2019s report, covering the week ending June 28th, showed that US crude stored fell […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-150890","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=150890"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150890\/revisions"}],"predecessor-version":[{"id":150926,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/150890\/revisions\/150926"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=150890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=150890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=150890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}