September West Texas Intermediate crude oil futures are in a position to close lower for the week despite clawing back most of its weekly loss since Wednesday. The price action suggests investors are trying to find a point on the chart to balance concerns about oversupply and lower demand with the possibility of reduced exports from the Middle East and dwindling spare capacity.
The week started with a steady opening tied to worries over strikes in Norway and Iraq disrupting supply, but sellers quickly took care of that by driving prices sharply lower on the news that Libya had restarted output from a major oil field.
Prices were further pressured by reports that centered on a possible sale of U.S. oil reserves. Currently, the United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country’s oil reserve, according to a Bloomberg report. This move would definitely increase supply and weigh on prices.
After trading down to its lowest level since June 22, WTI crude oil was able to stabilize for two days before reaching its low for the week on Wednesday.
Helping to limit losses at mid-week was a strong short-covering rally, fueled by a reaction to a U.S. government inventories report.
On Wednesday, the U.S. Energy Information Administration (EIA) reported that crude oil inventories increased 5.8 million barrels in the week-ending July 13, compared with analysts’…