Oil Rebounds On Bullish Data, OPEC Meeting Date Set, Trade-Optimism Fuels Demand Hopes

Crude oil prices were moving lower in Wednesday trading until bullish inventory data hit the market. U.S. crude oil stockpiles were reported to have fallen by -3.106 million barrels according to the EIA. The draw is three times the expected reduction and helped WTI Recover some of the mornings losses. Total U.S. oil inventory is running about 7.0% above the five-year average for this time of year.
Bharat Gohri
Oil pump jacks on sunset sky background. Concept of growing oil prices

The oil inventory data was compounded by unexpected draws in distillates and gasoline that suggest rising U.S. production isn’t keeping up with demand. Traders had been expecting modest builds of inventory for both gasoline and distillates.

Declining imports of oil and fuel stocks contributed to this week’s decline in net inventory. Imports fell by -144,000 barrels per day bringing the YOY total to -7.6% over last year. Refinery runs increased over the past week which may offset the unexpected declines in gasoline and distillates in the coming weeks. Despite the drawdown, the total amount of energy product delivered in the U.S. is up 1.8% YOY over the trailing four-week period. This increase is led by a 2.0% increase in gasoline product delivered and a 4.0% increase in distillate products.

OPEC Sets Meeting Date

OPEC has finally set the date for its next policy meeting. The energy cartel has been wrangling over when it would meet to discuss the future of production caps put in place last year. The group is slated to meet in two weeks, July 1st, with a follow meeting with the OPEC+ nations the next day. At present, the cartel has cut production by 1.2 million barrels per day from nominal levels. Saudi Arabia has already come out in support of extending or deepening cuts whose purpose is to support prices. The cartel is not expected to lift the production cap at this meeting.

Trade-Optimism Fuels Demand Hopes

A series of Tweet’s from U.S. President Donald Trump on Tuesday have lifted optimism a trade-deal will be reached soon. The President said he had a long talk with Chinese President Xi Jinping and that the two will be meeting at the G-20 in Japan. The G-20 meeting is scheduled for June 28-29 in Osaka, Japan and provides neutral ground for the two to meet. Lingering trade tensions have sapped global growth acceleration and in turn demand for oil, a resolution of those tensions would be a bullish catalyst for oil prices.

The article was written by Bharat Gohri, Director of Sales and Retention at easyMarkets

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.