U.S. West Texas Intermediate crude oil futures are in a position to close lower for the week. Some of the selling pressure was generated by a confirmation of last week’s dramatic technical closing price reversal top.
The traditional supply/demand fundamental news was mixed. However, the main determinant of the direction appears to have been lower appetite for risky assets in response to worries over an escalating trade war between the United States and China.
A combination of news events helped fuel a two-sided trade before the market turned decisively lower for the week.
Prices plunged at mid-week after China proposed a broad range of tariffs on U.S. goods that increased fears of a trade war. However, the market began to mount a comeback after the release of a friendly government inventories report and a massive turnaround in the U.S. stock market.
According to the U.S. Energy Information Administration, U.S. crude inventories fell by 4.6 million barrels in the week-ended March 30. Analysts were expecting an increase of 246,000 barrels.
The EIA data showed the drop in inventories was fueled by a rise in refinery crude runs which jumped by 141,000 barrels per day. Refinery utilization rates rose by 0.7 percentage points.
Gains may have been limited by a report of a 3.666 million barrel build at the Cushing, Oklahoma futures storage hub.
The market received additional support from a report showing OPEC oil production fell in March…