Oil Down Over Surprise Build in U.S. Crude Oil Supplies, Possible U.S. Default
29 Sep 2021
Brent Oil was trading 0.74% down at $77.80.
Oil was down Wednesday morning in Asia as investors digested a surprise integration of U.S. petroleum supplies.
Brent oil futures slid 1.47% to $77.20 by 12:31 AM ET (4:31 AM GMT) and WTI futures fell 1.53% to $74.14.
U.S. petroleum supply data from the American Petroleum Institute, released on Tuesday, showed a build of 4.127 million barrels for the week ending Sep. 24. Forecasts prepared by Investing.com had predicted a draw of two .333 million barrels, while a 6.108-million-barrel draw was recorded during the previous week.
Investors now await petroleum supply data from the U.S. Energy Information Administration (EIA), due later within the day. If EIA data confirms the build, it might be the primary increase in U.S. inventories in eight weeks.
The surprise build halted the black liquid’s recent rally that was supported by a tightening global market as China, the world’s top oil exporter faces an energy crunch. Increasing fuel demand as economic recovery from COVID-19 continues, and powerful gains in gas also contributed to the rally.
Although there’s an interruption for now, “oil prices will remain supported and elevated,” Oversea-Chinese Banking Corp. economist Howie Lee told Bloomberg.
“Stocks, especially within the U.S., are still quite tight. If global stocks deplete further, we could see Brent futures going even higher toward $85.”
Meanwhile, concerns also are growing a few debt-ceiling impasse within the U.S. after Republicans within the Senate blocked a Democrat move to boost the debt ceiling .
U.S. Federal Reserve System Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen both warned that a default thanks to a failure to boost the debt limit would be catastrophic in their testimonies before a Senate Banking Committee hearing on Tuesday. The pair also will testify before a House Banking Committee hearing on Thursday.
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TRADE SIGNAL-Brent Oil– Buy: 77.10, TARGET:-83.10, STOP LOSS:- 74.10.