WTI Oil Gains Ground After EIA Report

Key Insights

• WTI oil continues its attempts to move closer to the key $90 level. 
• Natural gas markets enjoy strong support as traders bet that the railway strike will hurt coal supplies and force producers to use natural gas in electricity generation. 
• Copper markets lost momentum and pulled back towards the $3.50 level. 

WTI Oil Tries To Settle Above $89

WTI oil moved back above the $89 level after the release of EIA Weekly Petroleum Status Report. The report indicated that crude oil inventories increased by 2.4 million barrels from the previous week. Analysts expected that crude oil inventories would grow by 0.8 million barrels.

Gasoline inventories declined by 1.8 million barrles, while distillate fuel inventories grew by 4.2 million barrels. Domestic oil production remained unchanged at 12.1 million bpd.

The oil market remains supported by the recent report, which indicated that U.S. could buy oil near the $80 level to refill reserves.

Currently, WTI oil is trying to settle above the 20 EMA. In case this attempt is successful, WTI oil will move towards the $90 level. A move above this level will open the way to the test of the resistance at $92. If WTI oil manages to settle above $92, it will move towards the 50 EMA, which is located near the $94 level.

On the support side, the nearest material support level for WTI oil is located at $86.50. A successful test of this level will push WTI oil towards the next support level at $85.30.

Natural Gas Markets Rally As Railway Strike May Hurt Coal Supplies

Natural gas markets rallied above the $8.70 as the rebound continued. The U.S. railway strike may lead to problems with coal supply and increase demand for natural gas to generate electricity.

In Europe, natural gas markets rebound as traders begin to prepare for colder days. The EU will not introduce a price cap for natural gas. Instead, the EU expects to raise more than $140 billion from energy firms to protect consumers from high prices.

This decision will not increase supply of natural gas and may hurt producers’ ability to invest in future supply, so it is bullish for European natural gas markets. If the rebound in the European natural gas markets is strong, it may provide additional psychological support to U.S. natural gas markets.

Silver Moves Back Towards Above The $19.50 Level

Silver climbed back above $19.50 as the U.S. dollar pulled back from yesterday’s highs. The rebound in platinum and palladium markets was especially strong. Platinum moved back above the $900 level, while palladium returned to the $2150 level.

Meanwhile, gold remains stuck near the $1700 level. At this point, traders stay focused on the aggressive Fed and are not ready to increase their long positions in gold.

Copper Declined Towards $3.50

Copper pulled back towards the $3.50 level after yesterday’s unsuccessful attempt to settle in the $3.60 – $3.70 range.

In case copper manages to settle back below $3.50, it will have a good chance to gain additional downside momentum and move towards the recent lows near $3.37.

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