After 3 consecutive weeks of higher crude oil inventory data, traders may want to be looking elsewhere for their bullish signals. Other positive economic data helped to boost the price of spot crude oil yesterday. The news was strong enough to support a sustained price rise that held above the psychological resistance level of $80.
Yesterday spot crude oil prices rose to a high of $81 to close the day at $80.58. The price of spot crude oil opened the yesterday’s trading day at $79.67.
Spot crude oil was trading higher after a trading day that was filled with high profile economic data that helped to support the price of the commodity. Pushing the price higher was the ADP-Non Farm Payrolls report. The numbers showed 20K new job losses for the month of February. Market economists had predicted a loss of 50K jobs. This should be looked upon positively prior to this Friday’s Non-Farm Payrolls report from the Department of Labor. Also helping to send spot crude oil prices higher was better than expected U.S. service sector data from the Institute for Supply Management.
The rise in crude oil inventories as reported by the U.S. Energy Information Administration (EIA) did little to dismay traders from bidding up the price of spot crude oil. Crude oil inventories rose 4.1M barrels last week. Market expectations were on average of an increase for 1.2M barrels. Yesterday’s trading showed very little impact from the inventories report.
The EIA report does show the spot crude oil trading market that prices are being influenced by other factors. Spot crude oil prices have risen despite 3 consecutive weeks of increases in crude oil inventories. Spot crude oil traders should be looking at other indicators for bullish signals. Two such economic data pieces are today’s U.S. monthly factory orders and tomorrow’s high impact Non-Farm Payrolls report. Traders should note spot crude oil resistance levels of $80.50 and $83.90.
