US commercial crude oil inventories dropped -7.2m barrels in the week ending June 26, much larger than expectation of -0.9m barrels decline. At 533.5m barrels, oil inventories are about 15% above the five year average for this time of year. Gasoline inventories rose 1.2m barrels. Distillate fuel inventories dropped -0.6m barrels. Propane/propylene inventories rose 3.3m barrels. Total commercial petroleum inventories rose 1.1m barrels.
WTI has little positive reaction to the sharp decline in inventories. XTI/USD dropped below 40 as a temporary top was formed at 40.41. Deeper decline might be seen back towards 36.87 support. In the bigger picture, recent rebound from March’s spike low appeared to have lost upside momentum, as seen in daily MACD, ahead of 42.05 key resistance. Break of 36.87 should confirm short term topping and bring deeper correction back to 34.36 support and possibly below.