Let’s take a closer look. The WTI oil price has been in a comatose sideways trend since last Friday. Directly at the 56 Dollar level (chart since last Thursday). Then yesterday at 7pm German time the breakout followed upwards, from 56 to 57.45 Dollars (currently 57.00 Dollars).
API data and oil price
Yesterday evening at 10:30 p.m. German time the private American Petroleum Institute (API) published the self-determined inventories of crude oil in the USA. Compared to the previous week, there was a decline of 11 million barrels (expectations were -4)! Wow, that’s a real number. So it is understandable that the oil price rises? Rubbish! WTI oil had already risen to 57.09 Dollars before 10:30 pm. So the API data were not responsible for the big part of the price increase at all.
Trade war and Iran
The climb happened in the hours before. The reason for this was the news that the U.S. trade delegation will be on its way to China next week to resume talks to defuse the trade war. This, of course, raises hopes for an easing, which would mean a revival of the global economy – and thus more oil demand. On top of this is the intensifying Iran conflict. Therefore the oil price may rise by 1 Dollar, after the weakness in the oil market lately?
EIA datas today
Today at 4:30 p.m. the US Energy Agency EIA will announce its official inventory data. The API data have already offered a preview. If the government inventory data turns out to be even or even lower, the oil price could rise further. The opportunity for this is certainly there.
Let’s look at the bigger picture again. The following chart shows the WTI oil price since mid-June. Since July 11th there has been a decline of more than 6 Dollars. Taking Iran, China-USA hopes and falling inventories together, there could indeed be an upward momentum. The fact that the US Dollar has been rising for the whole week is, of course, a pressure against a possibly rising oil price. But let’s wait and see whether the API data will be confirmed today at 4:30 pm or even surpassed!