Today’s EIA inventories report, due out at 14:30 GMT, is expected to show a draw of 1.0 million barrels. Matching the forecast should underpin prices.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading slightly better in limited trading as traders await the release of today’s U.S. Energy Information Administration weekly inventories report at 14:30 GMT.
The markets are being underpinned by optimism over improving U.S. fuel demand with the official start of the U.S. summer driving season this Monday, Memorial Day, and a private industry report showing a drop in weekly inventory estimates. Both events are canceling worries over the possibility of increased supply from Iran.
At 08:35 GMT, July WTI crude oil is trading $66.09, up $0.02 or +0.03% and August Brent crude oil is at $68.49, unchanged.
The API on Tuesday reported a draw in crude oil inventories of 439,000 barrels for the week ending May 21. Analysts had predicted a draw of 1.050 million barrels for the week.
The API also reported a draw in gasoline inventories of 1.986 million barrels for the week ending May 21, compared to the previous week’s 2.837-million-barrel draw. Analysts had expected a 775,000 barrel draw for the week.
Distillate stocks saw a decrease in inventories this week of 5.137 million barrels for the week, after last week’s 2.581-million-barrel decrease.
Cushing inventories fell this week by 1.153 million barrels.
Iranian government spokesman Ali Rabiel said on Tuesday he was optimistic over Tehran reaching an agreement soon at talks with world powers to revive a 2015 nuclear deal, although Iran’s top negotiator cautioned that serious issues remained.
Goldman Sachs has said it expects oil prices to climb to $80 per barrel in the fourth quarter, arguing that the market has underestimated a rebound in demand, even with a possible resumption of Iranian supply.
Today’s EIA inventories report, due out at 14:30 GMT, is expected to show a draw of 1.0 million barrels. Matching the forecast should underpin prices.
This week’s price action indicates that traders are counting on higher demand during the northern hemisphere’s summer driving season and the lifting of coronavirus curbs to offset any worries over additional oil from Iran and lingering COVID-19 cases in India and parts of Asia.
For a look at all of today’s economic events, check out our economic calendar.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.