Crude oil prices came under pressure mainly on the back of China’s step to increase its interest rates in order to curb inflation. Additionally, mixed sentiments in the global financial markets also led oil prices to trade lower.
Despite unrest in Egypt, the movement in Suez Canal was not affected. Nymex crude oil prices declined around 0.6 percent and closed at $85.82/bbl on Tuesday. On the MCX, crude oil (February futures contract) declined more than 1 percent and touched a low of `3905/bbl on Tuesday. Appreciation in the Indian Rupee extended losses on the domestic markets yesterday.
API Inventory Data
According to the report released by the American Petroleum Institute (API) on Tuesday, US crude oil inventories unexpectedly declined by 558,000 barrels in the week ending 4th February. Gasoline inventories increased 3.2 million barrels, while distillate inventories decreased by 538,000 barrels in the last week.
EIA Inventory Forecast
The US Energy Department (EIA) is expected to release its weekly inventory data later in the evening today. According to the Reuters poll, crude oil inventories are expected to increase by 2.4 million barrels for the week ended 4th February. Distillates stocks are predicted to decline by 1.2 million barrels and gasoline inventories are expected to increase by 2.5 million barrels in the last week.
Outlook Crude Oil
We expect crude oil to come under pressure in today’s session mainly on the back of China’s step to hike interest rates and expectations of rise in US crude oil inventories. If Egyptian concerns re-emerge then it could help protect sharp downside in prices.
