Oil Price Fundamental Daily Forecast – Traders Will Be Watching EIA Gasoline Numbers Today

U.S. West Texas Intermediate and international-benchmark Brent crude oil closed lower on Tuesday. Oil traded higher helped by expectations of another crude stockpile drawdown in the United States, but hindered by worries over the reopening of Libya’s largest oil field.

October WTI crude oil settled at $47.83, up $0.30 or +0.63% and November Brent crude oil closed at $51.58, up $0.30 or +0.59%.

U.S. gasoline futures also helped underpin the market. Speculators are betting that heavy rain associated with the remnants of former tropical storm Harvey will cause refinery flooding.

According to the latest weather forecasts, a tropical depression is expected to form over the southwestern Gulf of Mexico on Wednesday or Thursday. While it may not be a major storm, it may lead to the shutdown of a few refineries.

Traders expect Wednesday’s U.S. inventories report to show an eighth straight drawdown.

Capping the rally was a report that showed Libya’s Sharara oil field was gradually reopening after its latest shutdown. Early in the session, an oil official said it was shut again hours after reopening on Tuesday following a three-day pipeline blockade.

Sharara, which has been pumping up to 280,000 barrels per day (bpd) in recent weeks, has been affected by repeated shutdowns because of protests by armed groups and oil workers.

Forecast

Crude oil prices are trading lower early Wednesday, pressured by late Tuesday’s disappointing American Petroleum Institute’s weekly inventories report.

According to the API, U.S. crude supplies fell 3.6 million barrels for the week-ended August 18, but gasoline stockpiles unexpectedly climbed by 1.4 million barrels. Inventories of distillates also rose 2.1 million barrels. Traders were looking for a 3.7 million barrel draw in crude oil.

The news was disappointing because of the surprise gasoline build. This comes at a time when the U.S. driving season is winding down, typically a period of high demand.

Later today at 1430 GMT, the U.S. Energy Information Administration will release its weekly inventories report. It is expected to show a draw of 8.9 million barrels after a draw the week earlier of 6.5 million barrels.

October crude oil is short-term rangebound. A sustained move over $47.77 will indicate the presence of buyers with $48.57 the next target. A sustained move under $47.49 will signal the presence of sellers with $46.62 the next downside target.