Yesterday’s American Petroleum Institute crude oil stocks figure showed the biggest drawdown in inventories since July of 2014, with 6.70 million barrels of West Texas Intermediate leaving storage in the latest reading. The result was intense momentum higher with WTI rising over $2 points from the day’s lows. Even with OPEC choosing to let production quotas remain unchanged in the semiannual meeting concluded on Friday, much of the support for elevated crude oil prices continues to disappear. More important than the American inventories which are adjusting to seasonal factors like the increased summer demand is China’s imports which have nosedived. China is rumored to have filled its own strategic petroleum reserves on the back of weaker prices and now is holding off on further purchases. The evidence comes from the volume of oil imports which dropped to the lowest levels since the first quarter of 2014, representing the biggest decline in imports on a monthly basis since 2010.
Oil Rallies on Inventory Drop
Daily Analysis - 10/06/2015