June West Texas Intermediate Crude Oil futures is under pressure this week, but in a position to close higher for the week if enough buying comes in to drive the market over $49.62 on the close on Friday. I mention this because this will mean the surprise draw reported by the U.S. Energy Information Administration this week is exerting a positive influence on crude oil prices.
If crude oil prices fail to close higher, then this will indicate that investors believe rising gasoline stocks will have an extended bearish influence on crude oil prices.
On Wednesday, April 26, traders initially drove prices higher from their intraday lows after U.S. data showed refiners used up more crude oil than ever from storage tanks, drawing down stockpiles. However, prices weakened into the close as falling gasoline prices weighed on the crude oil market.
Based on the government report, we can conclude that refineries returned from maintenance season, increased runs to an all-time modern record for crude processing, and turned the crude oil surplus into petroleum products.
The U.S. Energy Information Administration supported this conclusion when it reported that U.S. crude inventories fell 3.6 million barrels last week. The draw was significantly more than analysts and traders were expecting and completely opposite from the nearly 900,000-barrel build reported late Tuesday by the American Petroleum Institute.
The EIA report also showed that refiners processed nearly…