The Oil price is proving surprisingly robust. Last week we talked about the “Everything will be fine rally” with rising prices. But now the American WTI Oil has been able to hold on to its high level around the 40 Dollar mark for days. And this, when the new corona infections in the USA continue to rise, and rise, and rise. There is a danger of new major restrictions on everyday life in the USA, and thus also the danger of less economic activity. Which would automatically lead to less demand for oil.
Oil price ignores API data
But well, the futures market for Oil is currently ignoring this, and the Oil price is keeping robust. This is even more astonishing when you think of the release of last night’s inventory data. The American Petroleum Institute (API) announced yesterday at 10:30 pm German time the storage quantities for Oil in the USA which it calculated. In the case of crude Oil, inventories are said to have increased by 2 million barrels in a week-on-week comparison. However, a change of -3.7 million barrels was expected. And what was the price of Oil doing? Is it slipping? No. From $40.30 just before the data, it actually rose slightly from $40.30 at night until this morning. We are currently seeing WTI Oil at $40.44.
EIA data ahead
Today at 4:30 p.m., as every week, the government-determined inventory levels of the Energy Information Administration (EIA) for the USA will follow according to the API data. If there is indeed a rise in inventories, as reported by API, then the Oil price could drop. If the slide does not happen and the market stays at $40, this would be a real, genuine sign of strength. Namely, strength, which says: “We in the futures market believe in a steady global economic recovery, and Oil demand will continue to rise, even as corona figures rise”. By the way… on July 15th, the JMMC, a supervisory body of OPEC to monitor compliance with the production cuts, will meet. This date could bring more momentum to the oil market.
The chart shows the development of Oil prices in the last ten days