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Commodity Market: US Crude Oil retreats as API reports unexpected surge in US crude stocks, resurgent virus stokes demand concerns

Futures on US West Texas Intermediate Crude Oil resumed slide on Wednesday after an industry report revealed an unexpected surge in US crude stockpiles last week. Additionally, a second wave of COVID-19 infections across Europe and the probability of another round of lockdown restrictions in Britain have added to fuel demand concerns.

“A resurgence in cases could prove to be a stumbling block for the demand recovery, although any lockdowns moving forward are likely to be more targeted and localised,” ING Economics wrote in a note.

The American Petroleum Institute (API) reported on Tuesday that US crude oil stocks had risen by 0.7 million barrels during the week ended September 18th, surprising market players as analyst estimates had pointed to a 2.3 million barrel decrease.

In 2020, “world oil demand will be down by more than 10% on the year to around 90 million barrels per day due to the COVID-19 crisis,” Eurasia Group wrote in an investor note. “This will mark the biggest demand shock in industry history.”

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

On the supply side, Libya’s National Oil Corporation said on Tuesday that oil production was expected to increase by over 250,000 barrels per day by next week, while it resumes oil exports from the Zueitinia terminal.

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

Central Pivot – $39.75
R1 – $40.32
R2 – $40.83
R3 – $41.40
R4 – $41.96

S1 – $39.24
S2 – $38.67
S3 – $38.16
S4 – $37.64

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

Central Pivot – $41.72
R1 – $42.22
R2 – $42.67
R3 – $43.17
R4 – $43.66

S1 – $41.27
S2 – $40.77
S3 – $40.32
S4 – $39.86 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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