Crude oil stable in the early morning
After falling on August 24 amid a surge in crude oil inventory levels, crude oil is stable in the early morning hours on August 25. At 7:00 AM EST on August 25, the West Texas Intermediate crude oil futures contract for October delivery was trading at $46.70 per barrel—a drop of ~0.13%. The Brent oil futures contract for October delivery was trading at $48.94 per barrel—a drop of ~0.24%.
Surge in inventory levels dented the sentiment
The recently released crude oil inventory level reports by the API (American Petroleum Institute) and EIA (U.S. Energy Information Administration) reported a build in inventory levels. This dented the sentiment in the crude oil market. On August 23, the API reported that crude oil inventories rose by 4.5 MMbbls (million barrels) in the week ending on August 19. On August 24, the EIA reported that crude oil inventories rose by 2.5 MMbbls in the week ending on August 19. The market was expecting inventories to fall by 0.46 MMbbls.
The market is waiting for producers and consumers’ meeting scheduled for September 26–28 in Algeria amid increasing speculations about output freeze talks. The market is also waiting for the oil rig count data by Baker Hughes. The data are scheduled to release on August 26. In its latest report, Baker Hughes reported that the rig count moved up by ten rigs to 406. This raised concerns about an increase in domestic crude oil production.
On August 24, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), and Total S.A. (TOT) fell ~1%, ~0.96%, and ~0.19%. British Petroleum (BP) gained ~0.42%. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) fell 1% and 2%.
In the next part, we’ll discuss how copper, gold, and silver performed early on August 25.