WTI Oil Pulls Back As EIA Report Indicates That Domestic Production Is Growing

Key Insights

• WTI oil settled back below the $84 level after the release of the EIA report. 
• Gold and other precious metals moved lower as Treasury yields tested new highs. 
• Natural gas remains under pressure as traders see no signs of rising demand.

WTI Oil Settled Back Below $84

WTI oil pulled back towards the $83.50 level after the release of EIA Weekly Petroleum Status Report, which indicated that crude inventories declined by 1.7 million barrels from the previous week. Analysts expected that crude inventories would increase by 1.38 million barrels.

Total motor gasoline inventories declined by 0.1 million barrels, while distillate fuel inventories grew by 0.1 million barrels.

Importantly, domestic oil production increased from 11.9 million bpd to 12 million bpd. The increase in domestic oil production served as a bearish catalyst for oil markets.

Natural Gas Tests New Lows

Natural gas managed to settle below the support at $5.70 and is moving towards the $5.50 level. In Europe, natural gas prices have recently tested new lows.

There are no signs of rising demand, which is bearish for natural gas markets. The upcoming EIA report may indicate that natural gas stocks continue to increase at a robust pace, which could put more pressure on natural gas prices.

Gold Moved Closer To Yearly Lows As Treasury Yields Tested New Highs

Gold declined below the support at $1640 as Treasury yields tested new highs.

The nearest support level for gold is located at the $1615 level. In case gold manages to settle below this level, it will move towards the next support at $1600. A successful test of the support at $1600 will open the way to the test of the support at $1575.

On the upside, gold must settle back above $1640 to have a chance to gain upside momentum in the near term. The next resistance level is located at $1660. If gold gets back above this level, it will move towards the resistance near the 20 EMA at $1675.

Other precious metals have also found themselves under pressure due to stronger dollar and higher Treasury yields. Silver declined below the $18.50 level. Platinum settled below $900, while palladium tested support at $1950.

Copper Remains Under Pressure

Copper settled below the $3.35 level and made an attempt to settle below $3.31 as traders remained focused on recession risks.

The strong dollar has also put some pressure on copper markets. In the near term, copper bulls may struggle to find upside catalysts that could change the current trend.

For a look at all of today’s economic events, check out our economic calendar.