Crude Steady Following Fresh EIA Deficit Data

Fresh Inventories Deficit SeenCrude prices continue to hold within last week’s range as the latest EIA inventories yesterday failed to provide the catalyst for a fresh directional move. The EIA reported a 0.7 million barrel drawdown in US crude stocks, this was lighter than the 2 million barrel deficit the market was looking for but was sharp fall from the prior week’s 5.9 million barrel surplus.Gasoline Stocks Fell TooThe data also showed that gasoline stocks were down by around 1.1 million barrels over the week, taking the total inventory level to 218.4 million barrels. Meanwhile, distillate stockpiles were seen essentially flat (14k increases) to 118.2 million barrel. Though demand for gasoline and distillates has risen recently, higher refinery runs and utilisation rates mean that refiners have been able to satisfy demand.  Supportive Macro PictureIn terms of the macro backdrop, reduced Fed rate hike expectations as well as recent OPEC+ production cuts should help to keep oil prices underpinned near-term. Fears over the health of the Chinese economy are having an offsetting effect. However, with expectations that China will soon announce fresh stimulus, oil prices look poised for further upside near-term.Technical ViewsCrudeWhile the recent breakout above the 72.61 level and the bear channel top has stalled for now, the focus remains bullish while price holds above that area. Above here, 82.59 is the next objective for bulls, in line with bullish momentum studies readings.