Commodity Market: US Crude Oil rebounds as an unexpected drop in oil inventories brings temporary relief to markets

Futures on US West Texas Intermediate Crude Oil rebounded on Wednesday after a report showed US crude oil inventories surprisingly dropped last week, providing some relief to oil markets amid accelerating COVID-19 pandemic across the United States and other parts of the globe.

A report by the American Petroleum Institute revealed on Tuesday that US crude oil stocks had decreased by 6.829 million barrels to 531 million barrels during the week ended July 24th, following a 7.544 million increase in the previous week. Analysts on average had expected an increase by 357,000 barrels.

“This should temporarily alleviate some concerns about ongoing demand distress,” Stephen Innes, chief global markets strategist at AxiCorp, wrote in an investor note.

The official government report on crude oil inventories by the Energy Information Administration (EIA) is due out at 14:30 GMT today.

Meanwhile, the latest data by the Center for Systems Science and Engineering at Johns Hopkins University showed total confirmed COVID-19 cases had already surpassed 16.739 million worldwide, with US cases now exceeding 4.352 million. Global death toll has surpassed 660,000.

COVID-19 death toll registered single-day records in four US states on Tuesday, while new infections in Texas surpassed 400,000.

As of 9:05 GMT on Wednesday WTI Crude Oil Futures were gaining 0.90% to trade at $41.51 per barrel, while moving within a daily range of $40.95-$41.53. WTI Crude Futures have risen 0.47% so far this week and are also poised to register their third straight month of gains.

Brent Oil Futures were gaining 1.23% on the day to trade at $43.78 per barrel, while moving within a daily range of $43.22-$43.84. Brent Oil Futures have risen 1.14% so far this week and are also set to register their fourth consecutive month of advance in July.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $41.31
R1 – $41.73
R2 – $42.34
R3 – $42.76
R4 – $43.19

S1 – $40.70
S2 – $40.28
S3 – $39.67
S4 – $39.07

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $43.37
R1 – $43.70
R2 – $44.16
R3 – $44.49
R4 – $44.83

S1 – $42.91
S2 – $42.58
S3 – $42.12
S4 – $41.67