U.S. West Texas Intermediate crude oil futures are edging lower on Friday, giving up some of this week’s gain. Prices are being capped by doubts about demand recovery due to the COVID-19 pandemic and rising supply.
Although the futures contract is hovering near the high of its two-month trading range and slightly above a long-term 50% level, bullish traders are having a hard time extending the rally because of lingering demand concerns.
The market is also posting an inside move on the weekly chart despite a small gain for the week. This tends to indicate investor indecision and impending volatility. The weekly range is extremely tight with most of this week’s gains taking place on Wednesday. A lower close on Friday will mark the third lower close for the week, which isn’t a particularly bullish sign.
Fundamentally, crude oil was boosted this week by U.S. government data showing crude oil, gasoline and distillate inventories all declined the week-ending August 7, but gains were capped because the global oil supply is rising due to OPEC and its allies increasing output this month.
US Energy Information Administration Weekly Inventories Report
In its weekly report, the U.S. Energy Information Administration (EIA) reported that U.S. crude oil, gasoline and distillate inventories fell last week as crude production dropped sharply and refiners ramped up production.
Crude oil inventories fell by 4.5 million barrels, the EIA said,…