Crude Oil Traders Looking Ahead
Wednesday, Crude Oil prices started the day on the defense as traders responded to the action in the USD, and the supply report from the American Petroleum Institute (API) which had shown a surprise drawdown in inventories.
The USD initially rose after the ADP employment report revealed that just over 200-K non-farm private sector jobs were added into the economy last month which was a bit more than expected.
Then came a sharp fall in the ISM non-manufacturing PMI to 55.7 from 57.8 caused the Buck Bulls to head for the hills, leading to a bounce back in some USD-denominated commodities such as Crude Oil and Gold.
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The official Crude Oil supply data from the US Energy Information Administration (EIA) then hit the wire, causing WTI Crude Oil prices to initially turn North before quickly heading South.
Traders were relieved to see that Crude Oil inventories fell for the 5th time in as many weeks which contradicted the build of 1.8-M bbl that had been reported by the API.
But, the EIA report also revealed 2 Bearish points.
1. The drawdown of 0.3-M bbl in gasoline inventories was lower than expected, and the build of 3.8-M bbl in distillates were more than expected.
2. The EIA said Crude Oil production rose to 9.59-M bbl last week, up from 9.57-M bbl in the week prior. So, overall the EIA Crude Oil report was not as Bullish as it appeared initially, hence the lack of buying interest in WTI and the lower finishing price, – 1.59 to 59.69 bbl Wednesday.
Stay tuned…
HeffX-LTN
Paul Ebeling
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