WTI crude oil finished precisely flat on the day at $78.26 after rising as high as $79.77. The big figure appeared to be a hurdle along with worries about oversupply. That counteracted a broadly-positive risk tone that led to huge gains in equities along with a drop in the US dollar.
Normally, you would expect better than this from oil on a day like today but it’s been a struggle since the Middle East risk premium was taken out.
After the US equity close, we will get weekly inventory data from the API and that will be followed by tomorrow’s re-worked EIA release. Given the changes to the US data, expect some funky responses.
Also note that last Tuesday’s huge US crude slump came ahead of a big surprise build in the API report, which adds to the abundant speculation that it leaked. By the same token, today’s softness could indicate a leak as well and weak numbers. If that’s the case, look for shorts to cover after today’s data or tomorrow’s EIA numbers.