Local Data Releases Dominate Asia

#OPINIONLEADER#

Oil retreats on delayed EIA data.

Oil prices reversed course overnight as the delayed US official EIA crude inventory data was released. With two weeks of data released at once, net crude inventories fell by 3.15 million barrels, but gasoline inventories rose by 4.13 million barrels for the fortnight. Brent crude had tested $120.00 intraday but fell back to finish 2.15% lower at $115.60 a barrel. WTI tested $114.00 intraday but also slumped to finish 2.15% lower at $109.55 a barrel. In Asia. Both contracts have added 0.40% to $116.05 and $110.00 a barrel.

Although OPEC+ meets today, the meeting is likely going to be just a rubber stamp exercise this month. Looking under the bonnet of the two-week EIA release, some of the headline numbers flatter to deceive. The net drop in crude oil inventories was flattered by SPR releases, while the gasoline stock jump is because US refineries are running at over 95.0% capacity. This is an unsustainable run rate in the medium-term and the underlying numbers suggest the supply situation is as challenging as ever. With Ecuadorian and Libya production plummeting and no progress in Europe/Iran nuclear talks, any downside in oil prices should be limited.

Brent crude has support here at 116.00, followed by 111.30, the 100-day moving average (DMA) at 109.80 and then the rising 2022 support line, today at 108.30 a barrel. It has resistance at $120.00 and $121.25 a barrel.

WTI has support at $109.25, then its rising 2022 support line at $108.00, followed by the 100-DMA at 106.50 a barrel. It has resistance at $112.50, $114.00, and then$116.00 a barrel.