U.S. West Texas Intermediate crude oil futures are in a position to close flat-to-slightly higher this week. The market was set to close lower for the week before a huge short-covering rally on Thursday reversed the market to positive for the week.
Thursday’s nearly 2 percent rise was fueled by aggressive hedge buying tied to an industry report suggesting domestic crude stockpiles would soon decline again after a surprise rise in the latest week.
Traders said prices rallied early in the session when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma delivery hub for U.S. crude, dropped 1.1 million barrels since Friday, July 27.
Helping to push prices lower earlier this week have been a combination of factors. On Wednesday, prices plunged when the U.S. Energy Information Administration reported that in the week-ending July 27, total U.S. inventories rose 3.8 million barrels, while supplies at Cushing fell 1.3 million barrels.
Throughout the week, gains were limited and prices pushed lower on concerns about oversupply. Recently, Saudi Arabia, Russia, Kuwait and the United Arab Emirates have increased production to help compensate for an anticipated shortfall in Iranian crude supplies once U.S. sanctions take effect and to stabilize prices to prevent a global economic slowdown, which would lower demand.
Weekly Technical Analysis
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