Oil Price Fundamental Daily Forecast – EIA Data Expected to Show 2.4M Barrel Build

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Wednesday in reaction to a private industry report which showed an increase in U.S. crude and gasoline stockpiles.

At 0811 GMT, April WTI crude oil futures are trading $62.73, down $0.28 or -0.44% and May Brent crude oil futures are at $66.32, down $0.20 or -0.30%.

Crude oil futures were down a second day after the American Petroleum Institute’s weekly report showed an increase in U.S. crude and gasoline stockpiles, fueled by surging U.S. production, limited OPEC attempts to trim the global supply glut.

According to the API, U.S. crude stockpiles rose last week as imports increased, while gasoline inventories climbed and distillate stocks were drawn down.

The API report showed crude inventories climbed by 933,000 barrels in the week to 421.2 million, compared with analyst expectations for an increase of 2.1 million barrels.

Additionally, crude stocks at the Cushing, Oklahoma, futures delivery hub fell by 1.3 million barrels. The API data also said refinery crude runs dropped by 209,000 barrels per day.

Forecast

In addition to the API report, a stronger U.S. Dollar is also weighing on dollar-denominated crude oil futures. The dollar is being supported by hawkish testimony from Fed Chair Jerome Powell and rising U.S. Treasury yields. A stronger dollar tends to weigh on foreign demand for crude oil.

Prices could be driven further lower today if the U.S. Energy Information Administration’s weekly inventories report comes in higher than expected. Traders are expecting the EIA report to show a 2.4 million barrel build.

The dollar is likely to be driven by a slew of economic data including Preliminary GDP, Chicago PMI and Pending Home Sales.

Preliminary GDP is expected to rise 2.5%, down from the previous 2.6%. Chicago PMI is forecast at 64.2, down from 65.7 and Pending Home Sales are estimated to have risen by 0.4%, down from 0.5%.

Crude oil prices could be dealt a blow if the dollar rises in reaction to strong economic data and the EIA report is bearish.