Oil Prices Head to $70 Again Despite EIA Crude Inventory Draw

Oil prices surged higher earlier this month on Middle Eastern tensions, but has reversed back down now, on global economic worries. China is not responding with its stimulus programmes according to the market’s expectations, while the ECB president Lagarde painted a depressive picture for the Eurozone economy, which is keeping safe havens such as Gold supported, with the price of XAU approaching $2,700 after acing a new record high, while crude Oil is suffering, despite the EIA lowering its prediction for U.S. crude oil production for 2024 and 2025 in its most recent short-term energy outlook.

Oil prices surged in early October due to concerns over a broader conflict in the Middle East. U.S. WTI crude climbed to $78.50, marking a rise of more than $10 overall. However, as doubts grew regarding Israel’s potential response toward Iran, the upward momentum stalled, and WTI crude futures turned lower, dropping back under the $70/barrel mark. It remains close to $70 currently.

US WTI Chart Daily – Consolidating in A Tight Range

Following the ECB’s 25 basis point rate cut, ECB President Christine Lagarde commented on the greater downside risks facing the Eurozone economy. Meanwhile, U.S. retail sales exceeded expectations, coming in at 0.4% versus the anticipated 0.3%, signaling that consumer demand remains robust. WTI is now trading in a range-bound pattern, holding steady around $70.

Highlights of the Weekly US Crude Oil Report from the EIA

• Crude Oil Inventories: Declined by -2,191K barrels (expected increase of +1,835K)
• Gasoline Inventories: Fell by -2,201K barrels (expected drop of -1,471K)
• Distillates Inventories: Decreased by -3,543K barrels (expected drop of -2,181K)
• Refinery Utilization: Increased by +1.0% (expected decrease of -0.6%)

Private Oil Inventory Data (Released Late Yesterday):

• Crude: -1,580K barrels
• Gasoline: -5,926K barrels
• Distillates: -2,672K barrels

WTI crude oil was trading up close to $71 ahead of the report but made a bearish reversal toward $70.

US WTI Crude Oil Live Chart