CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Crude oil forecast: API data eyed as energy traders fly at night amid EIA debacle

Crude oil rises as economic signals support further growth; US API inventory data critical to prices amid EIA data blackout and 23.6% Fibonacci and the 20-day SMA offer potential resistance.

Crude oil prices were trading higher through early Asia-Pacific trading on Tuesday, extending gains from the prior day and putting Brent and WTI prices on track to snap a two-week losing streak. Energy traders hit the buy button despite a pullback in risk sentiment that sent US stocks lower on the opening day of US trading.

However, encouraging economic data out of the United States and pro-growth comments from Chinese policymakers helped support economically sensitive oil prices. US durables data beat analysts’ expectations overnight. Durable goods orders excluding transportation and military orders—a proxy for business spending—rose 0.5% month-over-month in May, beating the 0.3% Bloomberg consensus forecast. The surprise cooled fears about an incoming recession by showing underlying health in US manufacturing activity.

The Asia-Pacific region, meanwhile, is set to receive additional accommodative support from China, the economic engine of the eastern hemisphere. The People’s Bank of China Governor Yi Gang vowed to provide additional monetary support to the economy. The PBOC has been modest in its approach to loosening policy thus far, but the commentary may be intended to prepare the markets for additional easing actions in the months ahead.

China’s relatively low inflation rate compared to its major peer nations allows the PBOC some breathing room to cut rates when most countries are doing the opposite. The Chinese central bank cut its 5-year Loan Prime Rate (LPR) by 15-basis-points last month following a 20bps cut to its minimum mortgage rate for first-time home purchasers. Further cuts are likely to stimulate economic growth, which would bolster the oil demand, although Mr. Gang’s commentary alone seems to be enough to provide some upside for prices.

The American Petroleum Institute (API) is set to release US inventory data for the week ending June 24 tonight. Crude stocks increased 5.61 million barrels for the week ending June 17, a healthy gain and the highest since February. If tonight’s data shows a similar inventory build, it would likely pressure oil prices. The Energy Information Administration’s weekly report remains delayed indefinitely as the agency deals with technical issues relating to its servers. This void of information leaves energy traders with a considerable gap in data, leaving the API data all that more valuable for the time being. That said, tonight’s API release may have a larger-than-normal impact on crude prices.

Crude oil technical forecast

The 23.6% Fibonacci retracement level and the falling 20-day Simple Moving Average (SMA) may serve as confluent resistance if prices continue to rise after bouncing off the 38.2% fib level. A break higher would have bulls aim at the December 2021 trendline. Alternatively, the 38.2% fib may provide some resistance if the rally reverses.

Crude oil daily chart

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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