Summary:
- Weekly DOE inventories rise to +0.9M vs -2.7M exp
- Large draw in Distillate and Gasoline inventories
- Brent Oil probing 2017 peak
The latest DOE inventory numbers have shown a surprise build in the headline, with a reading of +0.9M considerably higher than the -2.7M expected or the -5.7M seen previously. The number was in fact fairly similar to last night’s API equivalent which showed a rise of 0.5M.
The first half of the year saw US inventories at their highest levels in the last 6 years. Current inventories are not far lower than those seen in 2015 – the highest of these years. Source: XTB Macrobond
The rise ends a run of for consecutive drops for US stockpiles and whilst it is relatively small in its scale it could be seen as negative for the oil price. However, upon closer inspection large drops in the gasoline and distillate inventories have at least taken the edge of the rise in the headline and could arguably be said to mean the overall report is positive for crude.
Gasoline inventories fell sharply by 5.5M against a consensus forecast of +1.5M and a prior reading of +0.9M. There was a similar size drop in the Distillate which came in at -5.2M vs -0.5M expected and +0.5M seen previously.
US oil production is estimated to have been 9.5M b/d in the past week. A rise of more than 1M on the past week. *NOTE this was artificially low due to the hurricane damage and the snapback likely represents those refineries coming back online. Source: XTB Macrobond
The daily chart reveals that Brent Oil is still in an uptrend with the market close to its 2017 peak of 58.86. This is in fact the highest level since July 2015 and could be seen as an important long term resistance level.
Brent Oil remains close to its 2017 peak at 58.86. This could be seen as an important resistance level. Source: xStation