{"id":153996,"date":"2019-08-22T08:58:25","date_gmt":"2019-08-22T12:58:25","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=153996"},"modified":"2019-08-22T07:59:15","modified_gmt":"2019-08-22T11:59:15","slug":"crude-rallies-on-inventories-draw","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/08\/crude-rallies-on-inventories-draw\/","title":{"rendered":"Crude Rallies On Inventories Draw"},"content":{"rendered":"
August 22, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Its been another frustrating week for crude traders given the initial rally in the market, and subsequent retracement lower.<\/p>\n

Oil was boosted mid-week by the latest industry reporting which showed an unexpected drawdown in US crude stocks.<\/strong><\/b>\u00a0The Energy Information Administration\u2019s report, covering the week ending August 16th<\/sup>, showed US crude stores falling by 2.7 million barrels. This was greater than the 1.9 million barrel draw the market was looking for. It also marks the second consecutive week of declines in US crude stores.<\/p>\n

Notably, the report showed that crude levels at the Cushing delivery hub in Oklahoma fell for a seventh consecutive week.\u00a0They declined by 2.5 million barrels and now sit at 42.3 million barrels. This is their lowest level since February.<\/strong><\/b>\u00a0The declines here have been attributed to the starting of the pipelines from the Permian region which mean that a reduced number of barrels now go to Cushing.<\/p>\n

Gasoline Stores Rose<\/strong><\/b><\/h2>\n

Despite the drawdown in crude stores, the report showed that gasoline inventories were higher over the week. Gasoline inventories\u00a0rose\u00a0by 312k barrels, a greater jump\u00a0than the 169k barrel gain forecast<\/strong><\/b>.<\/p>\n

Meanwhile, distillate stockpiles were also higher. Distillates, which include diesel and heating oil, rose by a solid 2.6 million barrels. This was far greater than the 314k barrel increase forecast.<\/p>

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The EIA also reflected a decline in net US crude imports, which fell by 616k barrels per day.<\/p>\n

Meanwhile, US crude production remained steady at 12.3 million barrels, just 100k barrels below<\/strong><\/b>\u00a0all-time highs.<\/strong><\/b><\/p>\n

Refinery crude runs were up by 400k over the week. Refinery utilization rates rose by 1.1% to 95.9% of total capacity.<\/p>\n

Risk Appetite Supporting Oil<\/strong><\/b><\/h2>\n

Crude prices have also been boosted over the week by the general improvement in risk appetite.<\/strong><\/b>Equities prices have recovered this week, following sharp losses last week. This is because the market is striking a more optimistic tone over\u00a0the outlook for US\/China<\/a>\u00a0trade negotiations.<\/p>\n

The two sides are scheduled to meet for a further round of talks in September. The markets are welcoming the absence of negative headlines, showing that\u00a0tensions have eased, for now.<\/a><\/p>\n

Earlier in the week, Trump declared that although he is not yet ready to make a deal with China, talks are progressing well. The potential for a trade deal is helping keep crude prices bid, given that China is the largest global consumer of oil.<\/p>\n

The demand outlook for oil ties in heavily to expectations for the Chinese economy. As such, plenty of two-way risks remain around the ongoing trade story as any breakdown in talks would be heavily bearish for crude.<\/p>\n

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

Following a brief move above the bearish trend line from July highs, crude is now back below the trendline. However, today, it is fighting to stay above the 55.81 level. While above here, focus is on a further grind higher towards the 58.01 level net. There, we also have the bearish trend line from year to date highs offering resistance. To the downside, 50.67 remains the key market to watch.<\/p>\n

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

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

By Orbex Its been another frustrating week for crude traders given the initial rally in the market, and subsequent retracement lower. Oil was boosted mid-week by the latest industry reporting which showed an unexpected drawdown in US crude stocks.\u00a0The Energy Information Administration\u2019s report, covering the week ending August 16th, showed US crude stores falling by […]<\/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-153996","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153996","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=153996"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153996\/revisions"}],"predecessor-version":[{"id":154000,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/153996\/revisions\/154000"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=153996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=153996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=153996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}