Oil Price Fundamental Daily Forecast – EIA Report Expected to Show 1.5M Draw

Barring any fresh news regarding Trump’s meeting with Xi, the direction of the crude oil market on Wednesday is likely to be determined by trader reaction to the U.S. Energy Information Administration’s (EIA) weekly inventories report. It is expected to show a 1.5 million barrel draw down. Prices could rise if the draw is bigger than forecast.
James Hyerczyk
EIA Oil Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are inching lower on Wednesday ahead of today’s government inventories report. The early price action indicates investors are showing little reaction to yesterday’s surge in prices, fueled by the hope that the U.S. and China will return to the negotiation table and the small draw reported by the American Petroleum.

At 08:53 GMT, August WTI crude oil futures are trading $54.03, down $0.10 or -0.18% and August Brent crude oil futures are at $61.82, down $0.32 or -0.51%.

Prices rose sharply on Tuesday after President Trump said preparations were being made for him to meet Chinese President Xi Jinping at the G20 summit in Osaka, Japan next week. The summit starts on June 28.

The surge in prices was all about future demand. The price action indicates weak shorts were driven out of the market on the thought that renewed trade talks could eventually lead to a trade deal that could lead to increased future demand.

In other news, prices were under pressure early Tuesday on the news that Japan’s exports fell for a sixth straight month in May as China-bound shipments weakened, underlining the impact of the trade war.

Tensions in the Middle East remain high with the U.S. sending 1000 troops into the region. However, without an actual disruption in supply, this story is likely to be pushed to the back-burner.

The OPEC-led production cuts along with the sanctions against Iran and Venezuela continue to provide support. In the meantime, traders are becoming more optimistic that OPEC and its allies will extend the plan beyond the June 30 deadline. The cartel is still trying to hammer out the dates of its important meeting.

American Petroleum Institute Weekly Inventories Report

Late Tuesday, the API reported a small draw in crude oil inventory of 812,000 barrels during the week-ending June 13. Traders were looking for a much larger 2.033-million barrel drawdown in inventories.

The net build is still a very large 34.02 million barrels so far this year.

Gasoline inventories rose during the week-ending June 13 in the amount 1.46 million barrels. Traders were looking for a 1.067 million barrel build. Distillate inventories fell by 50,000 barrels for the week.

Daily Forecast

Barring any fresh news regarding Trump’s meeting with Xi, the direction of the crude oil market on Wednesday is likely to be determined by trader reaction to the U.S. Energy Information Administration’s (EIA) weekly inventories report. It is expected to show a 1.5 million barrel draw down. Prices could rise if the draw is bigger than forecast.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US