Posted on 19 August 2010 by DailyFX
Crude oil got slammed early in the Wednesday session before rebounding notably following the DOE inventory report. Which is not to say that the report was bullish—it was not. But prices got low enough to spur a rebound in the commodity which has fallen precipitously from last week’s highs.
Crude oil resumed its downtrend on Wednesday, falling $0.35, or 0.46%. Things were looking much worse early in the session, as traders anticipated a bearish inventory report after the API survey indicated the crude oil stocks had built over 5 million barrels last week. The DOE report
did not reveal such a build, however, and in fact, showed that crude oil inventories declined by 0.8 million barrels. That being said, the overall report was still bearish as total petroleum inventories built 5.3 million barrels, sending levels further into 10-year high territory. Moreover, product stocks remain at record seasonal levels. On the other hand, one bright spot is demand, with year-over-year growth of 3.1% over the last four weeks. In the bigger picture, crude oil will likely continue to be rangebound as abundant supplies offset a bullish worldwide demand picture.Technical Outlook:
Prices continue to stall at the bottom of a rising channel established since late May, now at $75.20. A rebound sees initial resistance at $79.38, with a break beyond that exposing $82.64. Alternatively, a move to the downside exposes $72.07.
Tags | DOE inventory report, inventories, rebound, rising channel