Crude oil price jump after US inventories fall unexpectedly
The price of crude oil rose in the American session after the API released inventories data. Numbers showed that crude inventories declined by more than 11 million barrels in the past one week. This was much lower than what the market was expecting. In the previous week, the amount had declined by slightly above 3.5 million barrels. The EIA will release its inventories data later today. Analysts expect data to show that inventories declined by just 2.1 million barrels. This data comes at a time when there is a pull and push about Iran. On Monday, Trump signaled that he was prepared to meet with the Iranian leader. On the other hand, Iran demanded that the US removes the sanctions first.
Wall Street turned negative yesterday as investors continued to express their worry about the strength of the economy and the ongoing trade war. This was the third time in four days that Wall Street had ended the day lower. The S&P reversed earlier gains of 0.7% to end the day down by 0.3%. At the same time, the shorter-term Treasury yields eclipsed the long-term ones, causing the yield curve to invert again. Investors believe that the conflict between the US and China could continue for longer. Meanwhile, investors received important news of the planned merger between Altria and Philip Morris. The merger of the two companies will create a $200 billion tobacco group.
It will be a data-lite day, with no major data releases being scheduled. From Germany, the market will receive the import price index. This index is expected to have declined by -1.7% in July. From the UK, the market will receive the nationwide house price index and from Sweden, the statistics office will release the retail sales numbers. From the EU, the market will receive the private sector loans growth.
The EUR/USD pair continued the declines started on Monday. The pair is now trading at 1.1084, which is between the lower and the middle lines of the Bollinger Bands. The RSI dropped from a high of 80 to the current 39 while the accumulation/distribution indicator rose sharply. The pair will likely continue moving lower, with the next support being 1.1050.
The price of crude oil rose sharply after inventories data was released. The XBR/USD pair rose to a high of 59.57. On the hourly chart, the price is slightly above the 14-day and 28-day moving averages while the RSI has remained slightly below the overbought level. The dots of the Parabolic SAR indicator are below the current price while the Force Index was relatively unchanged. The pair will likely remain unchanged as investors wait for the EIA data.
The EUR/GBP pair continued the downward momentum started on August 12, when the pair was trading at 0.9325. On the four-hour chart, the pair has been making a series of lower lows, and is currently trading at 0.9028. This price is slightly below the 14-day and 28-day moving averages while the RSI has dropped to almost the oversold level. The pair will likely continue moving lower to test the important support of 0.9000.