Crude oil futures plunged to a 6 ½ year low this week, setting in motion a sell-off in unleaded gasoline and energy stocks.
The week started with crude oil holding steady after last week’s break. On Tuesday, the American Petroleum Institute (API) provided some support when it reported that crude oil inventories fell by 2.3 million barrels in the week ending August 14. Traders were looking for a decrease of 1.2 million barrels.
The API also reported that gasoline inventories decreased by 1.5 million barrels.
Support disappeared on Wednesday, however, following the release of the weekly petroleum inventories report by the U.S. Energy Information Administration (EIA) for the week-ending August 14. This report showed U.S. commercial crude inventories increased by 2.6 million barrels last week. This held total commercial crude inventory at 456.2 million barrels.
According to the EIA, total gasoline inventories decreased 2.7 million barrels last week. The figure helped maintain inventories in the middle of the five-year average range. Total motor gasoline supplied was up 6.5% compared with the same period a year ago. The EIA news, however, didn’t convince bullish investors to maintain their long positions.
October Crude Oil
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Technically, sellers were able to maintain their bearish stance with another lower-high and lower-low on the weekly chart. The market also continued to walk down a trend…