EIA Inventory Surprises Crude Oil Speculators

Global crude oil prices are trading at 94.28 this morning, with a marginal change from yesterday’s closing. Traders might expect oil prices to gain as fuel demand has been increased for the first time in last three months in the US. Secondly, the Beige Book said:

“Reports from the 12 Federal Reserve Districts indicated that economic activity has expanded since the previous Beige Book report, with all 12 districts characterizing the pace of growth as either modest or moderate.”

Positive sentiment may support oil prices to take positive cues. However, concern from eurozone may be seen after a downward revision in Germany growth outlook. Reports from the World Bank have also downgraded the economic situation in Japan, which will weigh on demand. There are no economic releases from Europe today.

Crude oil prices rose yesterday, after an Algerian gas field came under attack from Islamist militants and as data showed crude stocks fell in the United States last week. Traders were well surprised by the outcome of this week’s EIA inventory. Crude oil inventories fell 951,000 barrels, gasoline stocks rose 1.91mn barrels and distillate stocks rose 1.69mn barrels, as per EIA.  Crude stocks at Cushing rose by 1.78mn barrels to an all-time high of 51.86mn barrels, as per EIA. Markets had been expecting an increase in stocks.

The dollar held showed gains against the euro, as Japan’s yen slowed its pace of appreciation, with some technical levels and comments from central bank officials leading traders to reversed bets. The stronger US dollar weighed

The International Monetary Fund agreed to disburse 3.2bn Euros ($4.3bn) to Greece, after the country made new budget cuts, received more favorable aid terms from European nations and conducted a bond buyback.

WTI crude oil prices are expected to trade in an upside direction with limited gains ahead of the US economic releases tonight. Increase in housing starts and building permits of the US is likely to support oil prices on speculation of higher fuel consumption.

Natural gas futures closed lower on Wednesday, for the first time in five sessions and continued to decline on Thursday morning to trade at 3.420, pressured by some profit taking ahead of Thursday’s weekly inventory report despite colder weather in the Northeast and Midwest this week that has boosted demand. Natural gas inventories are expected to decline by 137bn cubic feet, actual data will be released by EIA later in the day.