Crude prices are drifting lower ahead of this morning’s Energy Information Administration (EIA) oil inventory report after the API reported a modest draw in crude, but a significant build in distillate fuel.
Yesterday’s expiration of the August Nymex WTI contract was mostly uneventful with the market trading in a relatively tight trading range. So far this morning the market is on the defensive after the API reporting a surprise build in total U.S. crude oil stocks.
Crude oil prices have been in a selling mode for most of this week on a combination of the evolving situation in Greece, a sell-off in Chinese equities and the growing possibility of an Iranian nuclear deal. All three areas can potentially lead to the current oversupply of oil growing even further.
Crude oil markets got a pop as they tried to look beyond this Greek debt debacle to the expectations that U.S. oil output will continue to fall and tropical Storm Bill in the Yucatan Peninsula may slow operations in refineries and oil platforms in the Gulf of Mexico.
Crude oil prices are continuing the rally with the spot WTI contract currently breaching the three-week old technical range resistance level. This morning OPEC released their monthly oil assessment. They kept global oil demand the same as in last month’s forecast and said they do not see an increase in demand for OPEC crude.