Inpex' decision to sell its…
Oil prices began to retreat…
In yet another bullish indicator for U.S. oil markets, the price of WTI crude oil futures for June settlement have notched $0.14 higher to settle at $102.19.
The May contract, set to go off the market today, also gained slightly to settle at $102.75, good for a 0.19% increase.
Once again, the crude markets recorded choppy trading despite bullish sentiment prevailing.
Weekly inventory data by the American Petroleum Institute (API) showed a much higher-than-expected drawdown of -8.02 million barrels against expectations for a 2.471 million barrel increase.
API reported gasoline inventories rose 2.9mb, relative to the DOE expectation for a draw of 1.0mb on the week. API also reported diesel inventories fell 1.7mb, relative to the DOE expectation for a draw of 0.8mb on the week. In total, API showed a draw of 3.3mb in oil and oil products on the week, relative to the DOE expectation for a build of 0.7mb.
Despite the sharp drawdown, the price of crude oil sold off with WTI price back below its 50% retracement of the move up from the April 12 low (at $101.07), and the 200-hour moving average currently at $100.97.
The price also cracked below the $100 level but abruptly stopped at the $99.88 level before rebounding into the settlement.
The WTI June contract currently trades near the middle of the 100-hour moving average at $104.66, while the rising 200-hour moving average is below at $100.97 (which is near the 50% midpoint at $101.07). The good news for the bulls is that the price decline has failed to sustain momentum below the 50% and 200-hour moving average.
China is beginning to ease lockdowns in Shanghai, a city of 25 million people, with factories preparing to reopen, adding more bullishness to oil demand, while Russian production has seen a 7.5% decline from end-March to the first half of this month. Additionally, continued discussion of European bans on Russian oil, including Germany’s announcement Wednesday that it would ban all Russian oil by the end of the year could continue to drive prices higher, alongside force majeure on Libya’s largest oilfields and closures of key export terminals.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.