Oil Price Fundamental Daily Forecast – EIA Report is Expected to Reaffirm Steady US Crude, Gasoline Demand

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher shortly before the release of the government’s weekly inventories report at 14:30 GMT. Traders are looking for the report to show that U.S. crude oil and gasoline inventories fell last week.

At 13:12 GMT, October WTI crude oil futures are trading $66.96, up $0.62 or +0.93% and October Brent crude oil is at $69.76, up $0.73 or +1.06%.

Oil prices weakened for a fourth session on Tuesday due to a strong dollar and as surging cases of coronavirus in Japan added to a weak demand picture in Asia.

The dollar advanced for a second straight session on Tuesday, bolstered by safe-haven demand. A strong dollar makes oil more expensive for holders of other currencies. Today, the dollar is slightly lower, helping to underpin crude prices.

Helping to cap gains, however, is the news that Japan, the world’s third-largest economy, extended its state of emergency in Tokyo and other regions on Tuesday and announced new measures covering seven more prefectures to counter a spike in COVID-19 infections that is threatening the medical system.

In other news, hedge funds and money managers cut net long positions in U.S. crude to the lowest since November in the week to August 10 as resurgent coronavirus infections in several countries dampened hopes of a rapid resumption in long-distance air travel.

Meanwhile, more bearish news could be on the way. In the United States, more supply is set to hit the market if official forecasts prove right.

U.S. shale oil production is expected to rise to 8.1 million barrels per day (bpd) in September, the highest since April 2020, according to the Energy Information Administration’s monthly drilling output report.

American Petroleum Institute Weekly Inventories Report

The API on Tuesday reported a draw in crude oil inventories of 1.163 million barrels for the week ending August 13, bringing the total 2021 crude draw so far to more than 56 million barrels, using API data. Analysts had expected a loss of 1.259 million barrels for the week.

While U.S. crude oil stocks continue their decline, U.S. oil production has slowly risen from 11 million bpd at the start of the year to 11.3 million bpd now, an increase of 100,000 bpd for the week.

The API reported a draw in gasoline inventories of 1.1979 million barrels for the week ending August 13 – compared to the previous week’s 1.114-million-barrel draw.

Distillate stocks saw an increase in inventories this week of 502,000 barrels for the week, compared to last week’s 673,000-barrel increase.

Cushing inventories fell this week by 1.735 million barrels, after last week’s 413,000-barrel decrease.

Daily Forecast

Ahead of the EIA report at 14:30 GMT, traders are looking for another drop in crude oil and gasoline inventories, while distillates are likely to have risen for a third week, an extended Reuters poll showed.

Based on the average estimates of nine analysts polled by Reuters, crude stocks dropped by around 1.1 million barrels in the week to August 13.