U.S. West Texas Intermediate and international-benchmark Brent crude oil prices retreated on Wednesday, failing to add on to the previous session’s strong gains. Nonetheless, the markets remained near their highest levels since 2015. Contributing to the weakness was low volume which appears to be drying up ahead of the New Year’s week-end.
February WTI crude oil futures settled at $59.64, down $0.33 or -0.55% and March Brent crude oil futures closed at $65.99, down $0.47 or -0.71%.
Forecast
Crude oil futures are posting a two-sided trade early Thursday. The first move was to the downside following in reaction to an industry report. At 0600 GMT, WTI crude oil is trading $59.78, up $0.14 or +0.23% and Brent is at $66.12, up $0.13 or +0.20%.
Late Wednesday, the American Petroleum Institute (API) reported a draw of 6.0 million barrels of U.S. crude oil inventories for the week-ending December 22. This was the fourth large draws in as many weeks. Traders were looking for a 3.97 million barrel draw.
The API also reported another strong build in gasoline inventories at 3.1 million barrels for the week-ending December 22. The forecast was for a 1.278-million barrel build.
Distillate inventories rose 2.8 million barrels versus a forecast of a 584,000-barrel draw.
Prices remain supported by a tightening market due to the OPEC-led plan to cut output. Additionally, outages in Libya and the North Sea have driven prices higher in recent days and weeks, respectively. Helping to limit gains have been concerns over increasing U.S. production.
Later today, the U.S. Energy Information Administration’s weekly inventories report is expected to show a draw of about 3.9 million barrels for the week-ending December 22.
Under trading conditions, prices would rise on a bigger-than-expected draw, however, the low holiday volume may limit the price movement.
This article was originally posted on FX Empire