Commodity Market: US Crude Oil rebounds after sharper-than-expected US inventory drop adds to demand optimism

Futures on US West Texas Intermediate Crude Oil rebounded on Wednesday, after an industry report stated that US crude oil inventories had dropped at a sharper-than-anticipated rate last week, which added to optimism fuel demand could resist the continuing spread of the coronavirus.

A report by the American Petroleum Institute revealed on Tuesday that US crude oil stocks had decreased by 4.4 million barrels during the week ended August 7th, following an 8.587 million drop in the preceding week. Analysts on average had expected a decrease by 2.9 million barrels.

The “fall in U.S. API crude inventories … the third sizable weekly fall in a row, has supported prices today,” Jeffrey Halley, senior market analyst at OANDA, said.

The official government report on crude oil inventories by the Energy Information Administration (EIA) is due out at 14:30 GMT today.

Oil market participants are also looking for indications that the political deadlock over the next fiscal stimulus programme in the United States, the world’s biggest oil consumer, can be overcome.

As of 9:01 GMT on Wednesday WTI Crude Oil Futures were gaining 1.07% to trade at $42.09 per barrel, while moving within a daily range of $41.56-$42.15. WTI Crude Futures rose 1.54% in July, which marked their third straight month of gains. US Oil has risen 1.22% so far this week.

Brent Oil Futures were gaining 1.06% on the day to trade at $44.96 per barrel, while moving within a daily range of $44.51-$45.04. Brent Oil Futures rose 4.86% in July, which marked their fourth consecutive month of advance. UK Oil has risen 0.70% so far this week.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $42.02
R1 – $42.54
R2 – $43.43
R3 – $43.95
R4 – $44.46

S1 – $41.13
S2 – $40.61
S3 – $39.72
S4 – $38.82

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $44.89
R1 – $45.36
R2 – $46.23
R3 – $46.70
R4 – $47.17

S1 – $44.02
S2 – $43.55
S3 – $42.68
S4 – $41.81