Another U.S. crude oil inventory draw yesterday pushed oil prices higher but by the end of the day gains were reversed as traders rushed to cover losses from bets on the precious metals market. Today, oil is modestly up but this could change by the end of trading.
The EIA is reporting its own weekly estimate of oil and fuel inventories at 10:30 am EDT (14:30 GMT) today and while over the past few weeks it has been in sync with the API, they have diverged, often markedly, before, so there is always the risk of another divergence.
This week, this risk appears to be small after yesterday the EIA reported in the latest edition of its Short-Term Energy Outlook that it expected global liquid fuel inventories to decline by a daily rate of 4.2 million barrels in the second half of the year. That’s compared to a daily increase rate of 6.4 million barrels during the first half of the year, so there is quite a reversal of supply trends.
Separately, OPEC is today releasing its August Monthly Oil Market Report that should provide a look into the cartel’s latest production figures and its take on supply and demand, which always affects prices as it either reinforces the current market sentiment or dampens it. Judging by Saudi Aramco’s upbeat recent take on the immediate future of oil demand, there is a chance the new MOMR will also be optimistic although probably guardedly as OPEC+ has already began to ease production cuts that, many feel, kept the global oil oversupply in check.
More data that could swing oil prices today is due out from the U.S. Bureau of Labor Statistics. The BLS will release the July consumer price index today, which will offer a glimpse into whether the U.S. economy is still in recovery mode or if the recovery is stalling. As it is the largest consumer of oil, U.S. CPI data serves as one of many gauges of oil demand health.
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