US commercial crude oil inventories dropped -3.1m barrels in the week ending July 12, less than expectation of -3.1m barrels. At 455.9m barrels, crude oil inventories are about 4% above the five year average for this time of year.
WTI crude oil has little reaction to the release. It was shot higher to 60.93 last week, mainly due to selloff in Dollar. WTI failed to sustain above 61.8% retracement of 66.49 to 50.64 at 60.34 as expected and dropped sharply lower from there. Focus is now on 56.05 support. We don’t expect a break there yet and more range trading is likely between 56.05 and 60.93. Nevertheless, firm break of 56.05 will indicate completion of rise from 50.64 and should pave the way to retest this low.
