Crude Rises Further As US Sees Large Stock Draw, EIA Data Later

Oil is higher again during the APAC session rising around 0.9% supported by the large drawdown in US inventories. The market rallied over July on signs that supply is tightening. WTI is holding above $82 at $82.14/bbl after a high of $82.40. Brent is $85.67, around its intraday low of $85.61. It reached a high of $85.99 earlier facing resistance at $86. $86.18 is the level to watch. The USD started the day lower following Fitch’s US downgrade but the index is now slightly higher.

• Bloomberg reported that API US crude inventories fell 15.4mn barrels with the key storage hub Cushing down 1.76mn, gasoline -1.68mn and distillate -512k, according to sources familiar with the data. The official EIA data print later today and if the crude draw is confirmed, it would be the largest stock decline since 1982.
• WTI futures contracts are in the widest backwardation since November, adding to sentiment that supply is tightening.
• There is only July ADP employment later in the US and Spanish unemployment in the euro area. The focus for crude is Friday’s US July payrolls.