American West Texas Intermediate and international benchmark Brent crude oil futures are declining on Thursday as fast traders have breathed a sigh of relief after the mixed inventory report was released on Tuesday and Wednesday.
Today’s move does not suggest over-the-top action, but rather more conservative traders looking for a stretch in the over-priced area, chasing prices due to a possible shift in sentiment on the part of aggressive traders.
Earlier in the week, traders expressed concern over the epidemic in India and its potential impact on global demand, however, since then the lifting of the lockdown in the United States and parts of Europe has overcome these concerns by optimism.
American Petroleum Institute Weekly Inventory Report
The American Petroleum Institute (API) reported late Tuesday that US crude oil supplies for the week ended April 30 declined by 7.7 million barrels. Reportedly, the traders were valued in a 3.9 million barrel draw.
The API also reported that gasoline reserves fell from pre-reported estimates of a drop of 5.3 million barrels vs. 500,000 barrels.
Meanwhile, distillate inventories declined by about 3.5 million barrels. Traders were looking for a fall of 1.6 million barrels.
Energy Information Administration Weekly List Report
According to the US Energy Information Administration (EIA), raw material inventories dropped 8 million barrels a week from 30 to 485.1 million barrels, against analysts’ expectations in a Reuters poll for a decline of 2.3 million barrels.
ESIA raised US gasoline stocks to 737,000 barrels a week to 235.8 million barrels, compared to analysts’ expectations in a Reuters poll for a 652,000-barrel drop.
EIA data showed that distillate stockpiles, which include diesel and heating oil, fell to 2.9 million barrels in the week to 136.2 million barrels.
Reports of mixed inventions may have given buyers a reason to pause. Both APIs and EIAs report declines in crude oil and distillate inventories, but gasoline inventory data give mixed results. The API reported a major decline, but the EIA report showed an unexpected increase in inventions.
As soon as we are in the US In the summer driving season, traders will shift their focus to gasoline numbers. It is still a little early in the season, so gasoline data is not a bargain. However, between 31 May and 5 September, fast traders would expect to see strong demand for gasoline.