Vladimir Zernov
Add to Bookmarks
Crude Oil

Oil Video 22.07.20.


U.S. Crude Oil Inventories Increase By 4.9 Million Barrels

EIA has just provided its Weekly Petroleum Status Report which showed that U.S. crude oil inventories increased by 4.9 million barrels. The market was mostly prepared to hear bad news since yesterday’s API Crude Oil Stock Change report indicated that crude inventories increased by 7.5 million barrels.

Know where WTI Crude Oil is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Imports increased by less than 0.4 million barrels per day (bpd) so rising imports do not fully explain the increase in crude inventories.

Gaosline inventories decreased by 1.8 million barrels while distillate fuel inventories increased by 1.1 million barrels.

The closely watched U.S. domestic oil production increased from 11 million bpd to 11.1 million bpd. This is a sign that current oil price levels encourage more production.

The increase in crude oil inventories and the simultaneous increase in U.S. domestic oil production is a problem for oil bulls since oil has just managed to get above the major resistance level at $41.50 and tried to gain more upside momentum.

Currently, it is trying to stay above this key level but the inventory news put material pressure on the upside momentum.

The inventory increase may be a sign that demand is not rebounding as fast as expected due to problems with containing the coronavirus pandemic in the U.S. In this light, the oil market may become increasingly sensitive to vaccine news.

U.S. Secures $1.95 Billion Worth Of COVID-19 Vaccine

While the race for coronavirus vaccine is heating up, the U.S. government takes no chances and tries to secure millions of doses in advance.

It is already obvious that the world – and demand for oil – will not be able to return to normal without an effective vaccine. The U.S. has agreed to purchase millions of doses of vaccine from Pfizer and BioNTech in case they are able to develop a safe and effective vaccine.

Most likely, we’ll see similar efforts from all developed countries and many emerging countries around the world, which will provide some support to the oil market.

However, mass vaccination will not happen anytime soon so oil will need tangible evidence of near-term improvements in supply/demand balance in order to continue its upside move.

A hope-based rally will not be sustainable without a regular decline in crude inventories which continue to put pressure on oil prices.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker