Oil Bounces Back on Technicals as Stockpiles Drop
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Oil rebounded from three-week lows as technical levels provided a floor for losses and a government report showed another decline in US crude stockpiles.
US oil inventories shrank by 4.87 million barrels last week, the Energy Information Administration said. That was a bigger drawdown than indicated by the American Petroleum Institute. Still, gasoline inventories rose by the most since January, casting doubt about the strength of fuel demand in the heart of the summer driving season.
West Texas Intermediate rallied 2.6% to settle near $83 a barrel, recovering recent losses after futures bounced off of the 100-day moving average, which has served as a support level for a month. Trend-following algorithms have been poised for selling since the beginning of the week, with the window for large-scale liquidations remaining open, Daniel Ghali, a commodity strategist at TD Securities, wrote in a note to clients.
Crude is up 18% for the year after OPEC+ curbed supplies, though prices have declined from a peak earlier this month on signs of poor demand in top importer China. The country recorded its slowest growth in five quarters in the three months to June, and the International Energy Agency has cited the Asian nation’s slowdown as a big factor in weaker global oil demand growth.
With some traders still upbeat on the outlook for the rest of the year, a flurry of bullish oil options traded on Tuesday. Those included contracts that would profit from a rally to $100 and beyond for WTI and Brent.
Prices:
- WTI for August delivery climbed 2.6% to settle at $82.85 a barrel in New York.
- Brent for September settlement rose 1.6% to settle at $85.08 a barrel.
by Bloomberg | Julia Fanzeres and Alex Longley
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas