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.
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.
Crude oil prices continue to struggle to the upside as the first snapshot of fundamentals this week--the API inventory report--was mostly bearish. The more widely followed oil inventory report is due out at 10:30 a.m. EST this morning which is expected to show an across the board build in the complex.
After moving sideways for several trading sessions the crude oil complex made a turn to the downside yesterday and continues on the defensive so far this morning. Since the uptrend started in mid-March the spot WTI contract has increased by about $13 per barrel before stabilizing and then turning lower.
The main and most important short term oil price driver continues to be the outcome of tomorrow’s OPEC meeting in Vienna. Neither Russia nor Mexico showed a willingness to cut their production in support of an OPEC cut.