U.S. Crude Retracts, Investors eye Crude Inventory Reports

U.S. crude prices have lost ground on Tuesday, after posting huge gains on Monday.  In North American trade, WTI futures for October delivery are trading at $59.02, down $2.71, or 4.41% on the day.

Crude Soars After Attack on Saudi Oil Field

Crude oil jumped on Monday, gaining a stunning 12.72%. Crude jumped as high as 63.33 and closed the day at 61.85. The huge gain followed a weekend attack on a Saudi oil refinery, which reduced Saudi Arabia’s daily oil output by 50%. After the initial surge following the Saudi attack, oil prices steadied early on Tuesday, only to lose ground in the North American session. Although Saudia Arabia is expected to quickly repair the damaged oil facility, investors remain nervous. Later on Tuesday, Saudi officials will announce a timeline for restoring full capacity to its oil production.

Ahead – U.S. Crude Inventory Reports

U.S. crude prices could show stronger movement on Wednesday, as there are two upcoming crude inventory reports. The American Petroleum Institute Weekly Inventories (API) will release its report at 20:30 GMT, with a projected decline of 2.1 million barrels. A second report will be released by the Energy Information Administration (EIA) on Wednesday at 14:30 GMT, with an identical estimate. The EIA reports have shown declines over four straight weeks. If the upcoming releases indicate higher declines than expected, I expect oil prices to rise.