Pre Open US - US Oil 26 July 2023

Yesterday's data from the trade group API revealed an unexpected weekly increase in US crude-oil inventories. This development came as a surprise to many analysts who had been predicting continuous inventory declines during the fall due to high summer demand, OPEC output cuts, and the US's plan to refill its Strategic Petroleum Reserve. The decline in oil prices may also be attributed to uncertainty surrounding the actions and statements of the Federal Reserve after its meeting concludes today.

In the week leading up to July 23, Russia's seaborne crude exports from Baltic and Black Sea ports dropped to the lowest level in seven months, amounting to 1.17 million barrels per day. Despite expectations that Saudi Arabia will maintain its August output cuts into September, Reuters reported that Russia is likely to significantly increase its oil loading in September, ending the period of steep export cuts.

At the same time, there are concerns about whether China, the world's second-largest oil consumer, will fulfill its policy commitments.

Furthermore, it is widely anticipated that the US central bank will implement a 25-basis point rate hike later today. WTI crude oil has reached the resistance level 80 and a possible correction may happen toward.