US oil reserves fall about 17 million barrels
A US agency revealed that said decline in reserves represented an alarming record
The US Energy Information Agency (EIA) revealed that commercial oil reserves in the United States suffered a spectacular drop of 17 million barrels during the week ending July 28. This reduction is much greater than what the market expected and represents a record in the reduction of inventories.
The volume of crude oil in storage stood at 439.8 million barrels, 17 million barrels less than the previous week, which surprised analysts who projected a reduction of only 1.05 million barrels, according to the consensus of Bloomberg Agency.
Already previously, brokers had anticipated a strong reduction in US crude inventories after data published by the American Petroleum Institute (API) the day before, which estimated a drop of 15.4 million barrels.
The market reaction was not as expected, as oil prices did not rise as might have been expected with bullish news. On the contrary, when the EIA report was published, crude oil prices fell.
North Sea Brent barrels for October delivery shed 2.01 % to $83.20 in London, while West Texas Intermediate (WTI) for September lost 2.31 % to $79.49 in New York.
Although the two world crude oil benchmarks had reached their highest level in more than three months on Wednesday morning, prices quickly found resistance and fell.
Bart Melek, an analyst at TD Securities, noted that despite the historic drawdown in commercial crude oil reserves, market concerns about an interest rate hike raised fears about the economic outlook.
On the other hand, Matt Smith of Kpler, indicated that the price of a barrel had experienced a strong increase in the last month and is now facing a resistance level.
In summary, the unexpected and significant decline in oil reserves in the United States surprised the market, but fear of interest rate movements and price resistance contributed to a drop in prices, despite the news. positive on crude oil inventories.
K. Tovar
Source: Bancaynegocios
(Reference image source: Grant Durr, Unsplash)
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