EIA crude inventories post surprise drop

Thursday, December 24, 2015

US crude oil inventories posted a surprise drop last week, bucking the seasonal trend of rising stockpiles and offering some lift to front month prices. EIA crude oil stockpiles were drawn down by 5.8m barrels during the week ending 18th December, way off analyst expectations of a 1.3m barrel increase with the positive surprise lifting front month WTI prices for the third straight session. The US benchmark managed to gain 2.8% throughout yesterday’s session, ending the day at $37.50 and posting a fresh two week and a half week high.

Chinese mainland equity indices pared recent gains during the overnight session as investors took short term profits off the table. Speculation that the recent rally has been overdone and robust IPO demand has prompted investors to adopt a wait and see approach as appetite for risk is moderated. With trading volumes in China on a steady decline throughout December we could see both the Shanghai Composite and CSI 300 benchmark indices come under renewed pressure as some market commentators express their doubts regarding year end targets.

A quiet session today with initial weekly jobless claims the only major data release of note. Market participants are expecting 270K new claims during the week ending December 19th, down 1,000 from the previous week’s reading of 271K. Trading volumes have thinned considerably over the past few sessions and with many market participants keeping their eye on Christmas Day and the prospect of a long weekend we expect a quiet session today.

Front month WTI futures get unexpected lift from falling crude stockpile data

CL1 Comdty Generic 1St CL Fut 2015 12 24 08 32 01

Events for today

1330

US

w/e

Initial Jobless Claims

2330

JP

Nov

Jobless Rate

Topics: Crude oil, WTI
More from: Kash Kamal