Oil Steadies Near 2-Week High

The latest Energy Information Administration report delivered on Wednesday showed that US crude inventories declined by 4.727 million barrels during the week ended July 14^th following substantial declines the prior two weeks. US oil inventories have now fallen in 13 of the past 15 weeks. However, Brent crude continues to remain below the key psychological mark of $50.00 per barrel. Persistently high supplies from the Organization of the Petroleum Exporting Countries, despite a pledge to curb output, have failed to tighten the bloated market.

Furthermore, US oil production hit a fresh cycle high, posing additional risks to the outlook.  Brent crude futures are currently trading around $49.70 a barrel, with $50.20 representing the immediate resistance on the upside. Any close above that level will complete the formation of a bullish head and shoulders pattern, potentially targeting $52.50 a barrel.

Groundbreaking activity in the United States jumped to a four-month high in June, buoyed by strength in the Northeast and Midwest regions. Housing starts surged 8.30% to a seasonally adjusted annual pace of 1.22 million units - the highest since February - with both single and multi-family construction rebounding after three straight months of declines according to the Commerce Department. Year-on-year, starts rose 2.10%, outpacing economist estimates of a 1.16 million-unit rate in June.

The May sales figure was revised higher from the previously reported 1.09 million units to 1.12 million units. Building permits, a key indicator of future construction activity, soared 7.40% to a 1.25 million-unit pace in June, with approvals for multi-family homes rallying to a five-month high. With the tailwinds from housing, the S&P 500 closed at a fresh record on Wednesday, with futures last trading around the 2470-mark.