Oil consolidates below $60 ahead of weekly US inventory report

Oil inventories due at the top of the hour

Oil inventories due at the top of the hour

US weekly oil inventories are due at the bottom of the hour. The consensus is for a build of 1750K of oil and a draw of 2500K barrels of gasoline with distillates down 1500K.

Yesterday’s private oil inventory report from the API showed a draw of 4200K in crude so the market is probably closer to that then the ‘consensus’. Gasoline inventories were down 3800K in the private report as well.

The API numbers initially boosted crude but it struggled on several attempts above $59. Yesterday WTI rose as high as $59.58 which is almost perfectly at the 50% retracement of the Q4 rout. That level and $60 loom as resistance and the failure to sustain a bid on a tight inventory report would be worrisome, especially with risk assets tilting negatively.

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