Oil Price Fundamental Daily Forecast – EIA Report Expected to Show 400K-Barrel Crude Oil Build

In addition to the surprise build in oil inventory, crude oil is also being pressured by uncertainty about the effectiveness of the U.S.-China Phase One trade deal after a top U.S. official said tariffs on Chinese goods would stay in place even after the agreement is signed.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging lower shortly before the regular session opening. Despite forming a potentially bullish closing price reversal bottom on Tuesday, traders are a little hesitant to buy after a private industry report released late Tuesday, showed an unexpected inventory build.

At 10:00 GMT, March WTI crude oil is trading $58.03, down $0.23 or -0.39% and March Brent crude oil is at $64.21, down $0.28 or -0.43%.

In addition to the surprise build in oil inventory, crude oil is also being pressured by uncertainty about the effectiveness of the U.S.-China Phase One trade deal after a top U.S. official said tariffs on Chinese goods would stay in place even after the agreement is signed.

On Monday, U.S. Treasury Secretary Steven Mnuchin said tariffs on Chinese goods will be in place until the completion of a Phase Two agreement. This rattled crude oil traders because it dampened hope the trade deal would lead to demand growth. As it stands, keeping the tariffs could reduce the economic benefits of the Phase One deal by limiting China’s access to its second-largest trading market.

American Petroleum Institute Weekly Inventories Report

The API reported on Tuesday a surprise crude oil inventory build of 1.1 million barrels for the week-ending January 10. Analysts were looking for a 474,000-barrel draw in inventory.

The API also reported another build of 3.2 million barrels of gasoline for the week-ending January 10 after last week’s large 6.7-million-barrel build. Analysts were predicting a 3.386-million barrel build for the week.

Distillates also saw inventories increase by 6.8 million barrels for the week. Cushing inventories saw no change.

Daily Forecast

Look for the U.S. Energy Information Administration’s weekly inventories report to set the tone on Wednesday. Due to be released at 15:30 GMT, it is expected to show an inventory build of 400,000 barrels.

A larger-than-expected build could send prices tumbling since traders are already agitated about the length of the U.S. tariffs and their potential impact on future demand growth.

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
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