Oil Bounced Expecting a Bullish Inventory Report
Crude oil futures increased early on Wednesday thanks to the American Petroleum Institute report that confirmed that there was a fall in crude oil reserves last week. The news has also offset concerns about rising coronavirus cases and reinforced the belief within the industry that demand will exceed increased supply.
September WTI oil is trading with an advance of 0.57% or $0.41 at $72.06. September Brent oil futures gained 0.46% or $0.34 at $74.82.
API reported a drop in crude reserves by 4.728 million barrels in the week ending July 23, compared to the expected reduction of 3.433 million barrels. It brought the total crude decrease in 2021 to nearly 54 million barrels.
The API also reported a reduction in gasoline reserves of 6.226 million barrels in the week ending July 23, compared to an increase of 3.307 million barrels the previous week. Distillate reserves decreased that week by 1,882 million barrels, in addition to the decrease of 1,255 million barrels last week.
Cushing’s reserves declined by 126,000 barrels that week, compared to a decrease of 3.567 million barrels last week.
The weekly inventory report of the US Energy Information Administration will be published today. It is forecast to show a drop in crude oil reserves of about 2.6 million barrels.
Natural gas wavers around $4.00
The latest weather forecasts lowered demand expectations for the beginning of August. The expiring August contract dipped as low as $3.874/MMBtu in the early trading. However, it recovered by 0.7 cents to $3.978.
The natural gas futures contract for September also gained 0.7 cents and was trading at $3.949.
Analysts believe that the market will continue to rise in the long term. Although there is some risk that traders will cut profits. Other than that, the round figure of $4.00 is acting as a significant barrier and could make people gain quickly.
