Crude oil recovered in the early morning hours
Crude oil started this week on a weaker note. It fell on August 1 to the lowest level since April 19. However, in the early morning hours on August 2, crude oil prices started recovering. At 7:00 AM EST on August 2, the West Texas Intermediate crude oil futures for September delivery was trading at $40.52 per barrel—a gain of ~1.2%. Brent crude was trading at $42.77 per barrel—a gain of ~1.5%.
Sentiment is still weaker in the crude oil market
Even though crude oil started August 2 on a positive note by recovering from lows created at the beginning of this week, the sentiment is still weaker. The fact that crude oil inventory levels are at the highest level for this time of the year is concerning the market. As a result, it dented the sentiment. According to Baker Hughes, the oil rig count data rose eight times in the past nine weeks. According to the data released by Baker Hughes on July 29, the oil rig count rose by three to 374. This is the fifth consecutive rise in the oil rig count. It triggered concerns about the chances of an increase in domestic crude oil production amid the supply glut.
Market awaits crude oil data
The crude market is looking forward to the crude oil weekly inventory data by the American Petroleum Institute and the U.S. Energy Information Administration. The data are scheduled to release on August 2 and August 3 respectively. The market is also looking forward to Baker Hughes’s oil rig count data—scheduled to release on August 5.
On August 1, major crude oil producers Carrizo Oil & Gas (CRZO), Canadian Natural Resources (CNQ), British Petroleum (BP), and Total S.A. (TOT) fell 8.9%, 3.8%, 3.1%, and 3.6%, respectively. The SPDR S&P Oil & Gas Exploration and Production ETF (XOP) and the PowerShares DB Oil ETF (DBO) fell 4.4% and 2.6%. Read Crude Oil Fell: Identifying the Right Oil-Weighted Stocks to learn about the correlation of crude oil–related companies with crude oil prices.
In the next part, we’ll discuss how metals performed in the early morning hours on August 2.