WTI/USD – US Crude Steady at $45 Ahead of EIA Inventory Report

US crude is showing little movement on Tuesday. In the North American session, WTI/USD futures are trading at $45.01 per barrel. Brent crude is trading at $46.92, as the Brent premium has widened to $1.91. On the release front, it’s a quiet day, with just two events on the schedule.  Building Permits matched the forecast while Housing Starts beat expectations.

Cure prices are steady ahead of the government weekly US crude inventory report, which will be published on Wednesday. The EIA indicator continues to post declines, and this week’s forecast stands at -2.3 million barrels. Crude is under pressure as the markets remain worried about the oversupply of US crude. Drilling activity in the US continues to increase, as oilfield services provider Baker Hughes reported on Friday that the number of US drilling rigs increased for a third straight week. This is raising concerns that higher production levels in the US will exacerbate supply levels and push down crude prices. In late June, US crude broke above the $50 level, but has since dropped about 10 percent and remains under pressure.

US consumer indicators were on center stage on Friday, and the numbers were a mixed bag. Consumer inflation reports posted small gains of 0.2%, as inflation levels remain soft. There was better news on the consumer spending front, as Core Retail Sales posted a strong gain of 0.7%, beating the estimate. The UoM Consumer Sentiment report dipped below the 90-point level for the first time in three months, missing expectations. The Federal Reserve is unlikely to raise rates before September at the earliest, unless there is some strong improvement in economic data, particularly inflation and wage growth, which remain at low levels.

WTI/USD Fundamentals

Tuesday (July 19)

• 8:30 US Building Permits. Estimate 1.15M
• 8:30 US Housing Starts. Estimate 1.17M

*Key events are in bold

*All release times are EDT

WTI/USD for Tuesday, July 19, 2016

WTI/USD July 19 at 11:30 EDT

Open: 45.16 High: 45.76 Low: 45.67 Close: 45.01

WTI USD Technical

• WTI/USD was flat in the Asian session. The pair posted gains in the European session but has reversed directions and headed lower in North American trade
• There is resistance at 46.69
• 43.45 is providing support

Further levels in both directions:

• Below: 43.45, 39.32 and 35.25
• Above: 46.69, 50.13 and 53.50

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