EIA Reports Massive Draw On Oil Supplies
Earlier today, the U.S. Energy Information Administration (EIA) issued their weekly inventory report. The figure came in at a whopping -10.027 million barrels, down nearly 8 million week-over-week. WTI has reacted as expected, with the October futures contract pushing above the $56.50. Could this report be the market driver energy bulls have been waiting for?
EIA Reports Massive Draw On Inventories
As Labor Day Weekend approaches, the peak demand of the U.S. summer season is drawing to a close. However, it is not going quietly as evidenced by this week’s inventories stats:
Event Actual Projected Previous
API Crude Oil Stocks -11.1M NA -3.5M
EIA Crude Oil Stocks -10.027M -2.112M -2.732M
Both the API and EIA reports came in well down from last week’s figures. Given the dwindling seasonal impact of travel demand, these numbers are poised to grow in the near future. While early September may continue to show lagging supply, this trend is likely to reverse by the September 18th EIA report.
WTI Crude Rallies On Supply Numbers
As expected, October WTI crude oil futures are on the bull following this week’s collection of negative inventories statistics. Since the API report Tuesday afternoon, WTI has been on the bull challenging the $56.00 level.
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Here are the levels to watch for October WTI during the late-session:
- Support(1): Bollinger MP, $55.41
- Support(2): Daily SMA, $54.73
Overview: At press time (about 1:00 PM EST), October WTI is well off intraday highs of $56.75. Price has retraced below the $56.00 handle and appears ready to test downside support. If we see a negative close today, a return beneath $55.00 will become probable by Friday’s closing bell.
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