US commercial crude oil inventories dropped -9.4m barrels in the week ending August 28, much larger than expectation of -2.0m barrels decline. At 498.4m barrels, US oil inventories are about 14% above the five year average for this time of year. Total motor gasoline inventories dropped -4.3m barrels. Distillate dropped -1.7m barrels. Propane/propylene rose 4.4m barrels. Commercial petroleum dropped -7.8m barrels.
WTI drops notably in early US session and pays little attention to the decline in inventories. It continues to struggle to extend larger rally despite various attempts. Nevertheless, downside of any retreat was limited. It’s also staying above near term trend line support. Thus, further rise remains mildly in favor.
However, considering that WTI is close to 55 week EMA (now at 43.89), break of 41.13 should confirm bottoming and bring overdue correction lower.
