Oil Price Fundamental Daily Forecast – API Weekly Inventories Report on TapThe direction of the August WTI crude oil market over the short-term is likely to be determined by trader reaction to the Fibonacci level at $41.56.
U.S. West Texas Intermediate crude oil futures are trading lower on Tuesday after running into a wall of resistance at a key Fibonacci level. The move also wiped out all of the market’s earlier gains. Traders are now preparing for the release of the American Petroleum Institute (API) weekly storage report. This could move the markets lower if the reports shows a larger than expected build in gasoline and distillates.
Traders said that oil prices fell as a rising number of COVID-19 cases sparked demand fears, although losses were capped after U.S. President Donald Trump soothed rattled investors over U.S.-China trade relations. Edward Moya, senior market analyst at OANDA in New York, also noted that crude prices pared gains when traders were unimpressed by a U.S. purchasing managers’ report.
At 20:17 GMT, August WTI crude oil is trading $40.14, down $0.59 or -1.45%. This is down from a high of $41.63.
API Weekly Storage Report
Last week, crude oil prices slipped on a surprise build. The API estimated on June 16 another build in crude oil inventories, this time 3.857 million barrels for the week-ending June 12. This was blamed on an increase of U.S. imports, and a drop in exports.
The API also reported a build of 4.267 million barrels of gasoline for the week-ending June 12. Analysts were looking for a 17,000-barrel draw for the week.
Distillate inventories were up by 919,000 barrels for the week, compared to last week’s 4,271-million-barrel build, while Cushing inventories saw a draw of 3.289 million barrels.
Based on Tuesday’s trade, the direction of the August WTI crude oil market over the short-term is likely to be determined by trader reaction to the Fibonacci level at $41.56.
A sustained move under $41.56 will indicate the presence of sellers. This could trigger a move into the major 50% level at $37.50.
Meanwhile, overtaking and sustaining a move over $41.56, could trigger an acceleration to the upside.
For a look at all of today’s economic events, check out our economic calendar.