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Commodity Market: US Crude Oil retreats on demand recovery risks, smaller-than-expected drop in oil inventories

Futures on US West Texas Intermediate Crude Oil retreated on Thursday on demand recovery risks stemming from a prolonged COVID-19 crisis and a lower-than-anticipated drop in US crude oil inventories.

A report by the US Energy Information Administration showed on Wednesday that crude oil stocks had decreased by 1.632 million barrels during the week ended August 14th, or a fourth consecutive period of decline. In comparison, analysts on average had expected a 2.670 million decrease in inventories last week.

The EIA report also stated that fuel demand had shrunk 14% over the past four weeks compared to a year ago.

In a statement at a virtual meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said that global oil demand might reach its levels from before the COVID-19 pandemic as early as the fourth quarter of 2020. Yesterday’s OPEC+ meeting was reviewing members’ compliance with recently agreed oil output cuts.

“The positive outcome from the OPEC+ meeting was counter-balance (to) the EIA reporting that U.S. oil inventories last week fell by (less than the) consensus,” Avtar Sandu, senior manager commodities at Phillip Futures, said.

As of 9:08 GMT on Thursday WTI Crude Oil Futures were losing 0.95% to trade at $42.70 per barrel, while moving within a daily range of $42.62-$42.97. WTI Crude Futures rose 1.54% in July, which marked their third straight month of gains. US Oil has risen another 5.58% so far in August.

Brent Oil Futures were losing 0.90% on the day to trade at $44.96 per barrel, while moving within a daily range of $44.90-$45.20. Brent Oil Futures rose 4.86% in July, which marked their fourth consecutive month of advance. UK Oil has risen another 2.98% so far in August.

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

Central Pivot – $42.71
R1 – $43.04
R2 – $43.35
R3 – $43.68
R4 – $44.02

S1 – $42.40
S2 – $42.07
S3 – $41.76
S4 – $41.46

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

Central Pivot – $45.16
R1 – $45.47
R2 – $45.78
R3 – $46.09
R4 – $46.41

S1 – $44.85
S2 – $44.54
S3 – $44.23
S4 – $43.93 is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover Forex, Price Action and Social Trading.

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