Commodity Market: US Crude Oil recoups part of recent losses after unexpected US inventory build

Futures on US West Texas Intermediate Crude Oil rose on Thursday, recouping part of the loss from Wednesday following a surprise increase in US oil and fuel inventories.

The official report by the US Energy Information Administration (EIA) showed yesterday that crude oil inventories had risen by 4.578 million barrels to 418.5 million barrels during the week ended September 24th, while snapping a seven-week streak of decline. Analysts on average had anticipated a drop by 1.652 million barrels.

US oil and fuel inventory build came as production in the Gulf of Mexico almost reached the levels from before Hurricane Ida swept through the region nearly a month ago. Production increased to 11.1 million barrels per day during the past week, data showed.

Meanwhile, the Organization of the Petroleum Exporting Countries and allies, OPEC+, are expected to agree next week to add 400,000 barrels per day to output in November.

“The underlying physical fundamentals remain supportive, with the gradual ramp-up of OPEC+ supply still lagging the demand recovery,” Citigroup Global Markets analysts wrote in an investor note.

They project oil balances to remain in a 1.5 million-barrel-per-day deficit on average during the upcoming six months, even as supply is increased.

“Demand from fuel-switching into the power generation sector could even increase the deficit,” Citigroup analysts wrote.

As of 8:24 GMT on Thursday WTI Crude Oil Futures were gaining 0.48% to trade at $75.19 per barrel, while moving within a daily range of $74.54-$75.24 per barrel. Earlier this week the black liquid climbed as high as $76.67 per barrel, or its strongest price level since July 6th ($76.98 per barrel). WTI Crude Oil Futures have risen 9.81% so far in September, following a 7.37% drop in August.

At the same time, Brent Oil Futures were inching up 0.03% on the day to trade at $78.46 per barrel, while moving within a daily range of $77.82-$78.90 per barrel. Earlier this week the commodity climbed as high as $80.72 per barrel, or its strongest price level since October 19th 2018 ($80.86 per barrel). Brent Oil Futures have risen 9.40% so far in September, following a 4.63% drop in August.

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

Central Pivot – $74.79
R1 – $75.83
R2 – $76.84
R3 – $77.88
R4 – $78.93

S1 – $73.78
S2 – $72.74
S3 – $71.73
S4 – $70.73

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

Central Pivot – $78.45
R1 – $79.38
R2 – $80.32
R3 – $81.25
R4 – $82.18

S1 – $77.51
S2 – $76.58
S3 – $75.64
S4 – $74.70