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Crude Prices Hold Steady on Better API Data

David Becker
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www.iforex.com
Crude Prices Hold Steady on Better API Data

Crude oil prices have tumbled nearly 6% during the past two weeks, as declining demand and increasing supply is generating headwinds for petroleum products. The lack of a supply disruption in the gulf do to hurricanes as well as the relative calm in the middle east has allow traders to focus on the demand picture as well as the increasing supply in the US.

In its latest inventory report, the American Petroleum Institute showed a decline in stock of crude oil. Crude oil inventories declined 5.5 million barrels, while gasoline supplies declined 3.6 million barrels and distillates stockpiles were down 500,000 barrels, according to reports of data late Tuesday. Analysts polled had expect crude oil stocks to decline 1.9 million barrels. Gasoline supplies were seen down 700,000 barrels, and distillate supplies are expected to add 1.1 million barrels.

On the demand, total products demand over the last four-week period averaged about 19.4 million barrels per day, down by 0.9% from the same period last year. Over the last four weeks, gasoline demand averaged over 8.9 million barrels per day, down by 1.0% from the same period last year. Distillate fuel demand averaged about 3.9 million barrels per day over the last four weeks, down by 3.1% from the same period last year.

Crude oil prices seem to be holding support levels near the March 2014 lows at $97 per barrel. A break of this level would likely lead to a test of support near $94 per barrel. Momentum is negative as the MACD (moving average convergence divergence) index is printing in negative territory with a downward sloping trajectory. The RSI has also turned negative reflecting downward price pressures, while printing near 32, which is on the lower end of the neutral range.

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