|Previous||-4.8 Million Barrels|
|Forecast||-1.8 Million Barrels|
|Analysis||Oil fell on Wednesday after Tuesday’s rise, as the dollar rose after Euro Zone ministers failed to reach an agreement over the Greek bailout, which increased concerns over the recovery of the Euro Zone, where Greece may not be able to pay its debt.|
Oil rose on Tuesday after the Chinese data which eased concerns over the outlook for the global growth, also, the US data which showed that the US economy is not as worse as expected, as the retail sales declined in May but better than expected, which spread optimism among investors over the outlook for the global growth.
Oil opened today’s trading at $99.40 and recorded so far a high of $99.62 and fell to record a low of $98.59 a barrel, where it is currently hovering around $98.66 a barrel. The US API report on Tuesday showed U.S. crude stockpiles dropped 3 million barrels, the lowest in seven weeks, where the Gasoline stockpiles climbed 1.13 million barrels to 213.5 million barrels, where the Oil-supply totals from the API and the Energy Department have moved in the same direction 72 percent of the time over the past year.
The S&P downgrade on Greece credit rating has affected oil prices negatively, as it may not be able to cover its debt; also, the EU ministers failed to reach an agreement for the Greek bailout and the deadlock might delay the passage of the new bailout, which increase the concerns over the outlook for the European recovery.
The dollar rose on Wednesday after the disagreement of the European minister on the Greek bailout, which pushed the Euro to the downside and backed the dollar, as the USDIX index that tracks the dollar against six major currencies, rose on Wednesday, where it opened today’s trading at 74.42 and recorded so far a high of 74.73 and a low of 74.40, where it is currently trading at 74.70.
Today the U.S will release the industrial production for May, where industrial production is expected to advance by 0.3%, compared to the prior flat estimate, while capacity utilization is expected to rise up to 77.1% from 76.9% in April.
More focus will be on the EIA report for crude oil inventories for the week ending June 10, where last week crude oil inventories decreased by 4.8 million barrels, and today’s report is expected to show that crude oil stockpiles fell by 1.8 million barrels.
Volatility will dominate the markets waiting for the EIA report and other data which will be a big mover for oil as USA is the world’s largest oil consumer and any unexpected change in its inventories or in data will move the market, while focus on Greece remains a dominant downside pressure on markets.