U.S. Crude Steady After Unexpected Inventory Surplus

U.S. crude prices are steady on Thursday, as the markets are calmer after sharp volatility early in the week. A surprise surplus in crude inventories is keeping upward movement in check
Kenny Fisher
Brent Crude Oil

U.S. crude prices are slightly higher in Thursday’s North American session. WTI futures for October delivery are trading at $58.82, up $0.50, or 0.84% on the day.

Crude Steady After Roller-Coaster Ride

It’s been a very busy week for crude oil. Crude prices showed sharp volatility early in the week, with double-digit gains on Monday after the attack on a Saudi oil refinery.  At one point this week, crude hit $63.37, its highest level since mid-April. Investors have since calmed down has retracted below the $59 mark. Is this the calm before the next storm? The U.S. and Saudi Arabia have publicly pointed a finger at Iran, which has denied any involvement in the attack. Tensions remain high and any further hostile acts could send crude sharply higher.

Crude Inventory Report Surprises

Investors keep a close eye on weekly crude U.S. inventory reports, which help gauge on the extent of oil stockpiles. The markets had expected a decline from a key crude inventory report. The estimate for the Energy Information Administration (EIA) report stood at -2.1 million barrels, but surprised with a surplus of 1.1 million. This reading comes on the heels of a report from the American Petroleum Institute (API), which project showed a surplus of 0.59 million. The surplus in crude supplies has pared the upward movement on Thursday. Still, crude has posted excellent gains of 7.0% this week.

Where is Crude Headed?

Crude oil prices shot higher early this week, punching above $63. The foray above the $60-level turned out to be short-lived, as crude retreated back below $60. Still, investors remain nervous, and renewed tensions between the Iranian regime and an unpredictable President Trump could be a recipe for higher oil prices. I  would not be surprised if crude regroups over the next several weeks and moves towards the $70 level. In the coming days, I would expect crude to remain close to the $60 level, possibly pushing past this level.


WTI/USD 4-Hour Chart
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