{"id":172740,"date":"2020-06-25T08:30:30","date_gmt":"2020-06-25T12:30:30","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=172740"},"modified":"2020-06-25T08:22:01","modified_gmt":"2020-06-25T12:22:01","slug":"crude-reverses-as-inventories-rise-further","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/06\/crude-reverses-as-inventories-rise-further\/","title":{"rendered":"Crude Reverses As Inventories Rise Further"},"content":{"rendered":"
June 25, 2020<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

Inventories Rise Again<\/strong><\/h2>\n

The latest report from the Energy Information Administration showed that in the week ending June 19th<\/sup>, US crude stores rose by a further 1.4 million barrels.<\/p>\n

This was above the rise in inventories recorded last week. It also surpassed the expected 1.2 million barrel reading the market was looking for. Once again, this reflects a lack of demand for fuel products, despite lockdown measures easing in the US.<\/p>\n

The total products supplied number is used as a proxy to gauge overall demand. This number was down over the last four weeks by an average of 8 million barrels per day. This is 17% lower than the same period last year.<\/p>\n

Second Wave Creating Headwinds<\/strong><\/h2>\n

Crude oil prices have been back under this pressure this week. This comes as a result of a trickier risk environment, as equities retreat on rising fears of a second wave of COVID-19.<\/p>\n

Fears of a fresh outbreak have taken the shine off the recovery underway across the globe as lockdown measures ease. Unfortunately, many countries are reporting fresh increases in the number of new infections.<\/p>

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Parts of the US has been reporting their highest numbers of the pandemic so far. This led to Apple announcing that it will temporarily close 11 US sites in response.<\/p>\n

Elsewhere, China has placed Beijing back under lockdown. The city has reintroduced travel restrictions as, it too, deals with a fresh surge in infection numbers.<\/p>\n

Meanwhile, in the UK, as the government prepares to ease lockdown measures further on July 4th<\/sup>, health authorities have warned of the risks of an increase in the virus.<\/p>\n

Traders have been shying away from riskier assets this week including oil prices which have seen heavier selling following decent buying on Monday.<\/p>\n

The risks of a return to lockdown measures in the event of a second wave raise obvious risks for crude oil. The commodity saw demand decimated over the first half of the year as a result of the virus.<\/p>\n

Bullish Forecasts From Citigroup<\/strong><\/h2>\n

The outlook is not totally bleak, however. Analysts at Citigroup<\/a> see crude prices recovering to north of $60 over the next 18 months.<\/p>\n

This would be fuelled by the heavy supply cuts in effect from OPEC+, along with the reduction in shale oil output as producers reduce activity amidst the price crash.<\/p>\n

Crude Still Capped by 61.8%<\/strong><\/h2>\n

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Crude oil price made a fresh attempt at breaking above the 61.8% retracement of the decline from 2020 highs this week. However, the level continues to hold as resistance.<\/p>\n

With bearish divergence showing on the RSI, the risk of a correction back lower is increasing. While price remains supported at the 33.17 level, however, focus remains on a further push higher and an eventual break of the 42.43 level.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex Inventories Rise Again The latest report from the Energy Information Administration showed that in the week ending June 19th, US crude stores rose by a further 1.4 million barrels. This was above the rise in inventories recorded last week. It also surpassed the expected 1.2 million barrel reading the market was looking for. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-172740","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/172740","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\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=172740"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/172740\/revisions"}],"predecessor-version":[{"id":172747,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/172740\/revisions\/172747"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=172740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=172740"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=172740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}