WTI moves another leg lower as both API and DoE inventory levels rise

• WTI trades 5.51% lower on Wednesday as inventory levels rise in the US.
• The EIA reported a 1.4mln increase in crude oil inventories for the week to June 19th.

Fundamental Backdrop

On Tuesday evening the American Petroleum Institue (API) reported that their weekly crude oil stocks rose 1.749mln vs the analyst expectations of 0.300M. Today The Energy Information Administration (EIA) also confirmed the news with a 1.4mln inventory rise. The general storage levels are still above the 5-year average and currently stand at 540.7mln barrels. 

To add to the problem of rising inventory levels, the energy market has to deal with the US coronavirus case count rising in some key states:

Arizona COVID-19 cases rose to 59,974 from yesterday’s 58,179.

Florida’s COVID-19 cases rose 5.3% Vs. previous 7-day avg. 3.7%.

California COVID-19 cases rose by 7149 Vs 5019 yesterday.

Texas COVID-19 hospitalizations increase by 7.3%.

Some further takeaways from the EIA report ealier

"US crude oil refinery inputs averaged 13.8 million barrels per day during the week ending June 19, 2020, which was 239,000 barrels per day more than the previous week’s average."

"Total products supplied over the last four-week period averaged 17.1 million barrels a day, down by 17.0% from the same period last year."

"Over the past four weeks, motor gasoline product supplied averaged 8.0 million barrels a day, down by 17.5% from the same period last year." 

Spot WTI 4-hour chart

Looking at the 4-hour chart, the upward sloping black trendline has now been broken to the downside. This has also led to the psychological USD 40.00 per barrel level being taken out along with the 55 Exponential Moving Average. 

The market could find some support near USD 34.63 per barrel as it has been used as a support in the past. Close to that level is the 23.6% Fibonacci extension zone and the 200 Simple Moving Average, this could give the area more clout. The indicators show no signs of slowing down at the moment but that is to be expected considering how fast the sell-off has been.