US commercial crude oil inventories dropped -0.4m barrels in the week ending May 7, versus expectation of -2.1m. At 484.7m barrels, oil inventories are about 2% below the five year average for this time of year. Gasoline inventories rose 0.4m barrels. Distillate dropped -1.7m barrels. Propane/propylene rose 2.5m barrels. Total commercial petroleum inventories rose 3.9m barrels.
WTI is back above 66 handle today, after some pull back earlier in the week. With 62.85 support intact, rebound from 57.31 is still expected to continue to retest 67.83. Nevertheless, as we’re still viewing such rise from 57.31 as the second leg of the corrective pattern from 67.83, we’d expect strong resistance from there to limit upside. Break of 62.85 should confirm the start of the third leg, a falling leg, of the pattern. However, strong break of 67.83 will resume the medium term up trend towards 70 handle first.
