Oil sinks with US Stockpile build doubling

• WTI Oil drops back below $74, under important support.
• API overnight print was double the previous build. 
• The DXY US Dollar Index sells off further and snaps below 101.

Oil prices are dropping near 1% during European trading hours on Thursday. The slide comes on the back of another build in US Stockpile numbers published overnight from the American Petroleum Institute (API). With a build of 1.837 million barrels against 0.939 million last week, the US seems to be plumbing Black Gold at an elevated pace. 

The US Dollar (USD) gapped lower this Thursday at the start of the Asian session and is still sliding lower. With that move, the US Dollar Index (DXY) snaps below 101 and is on its way to 100. As long as US yields do not stop falling, the Greenback looks to be hanging in the ropes – normally a positive for Oil but not today. 

Crude Oil (WTI) trades at $73.41 per barrel, and Brent Oil trades at $78.82 per barrel at the time of writing. 

Oil News and Market Movers: US keeps flooding markets

• Overnight Crude Stockpile publication from the American Petroleum Institute (API) was a surprise build of 1.837 million barrels against 0.939 million last week.
• This evening near 15:30 GMT the Energy Information Administration (EIA) will release its number of barrels. Previous was a build of 2.909 million, with a drawdown of 2.704 million expected. 
• QatarEnergy has signed a supply agreement with Shell International in Singapore to supply 18 million barrels per year of Qatari Crude as of 2024.
• Refiners in India are triggering a boost in supplies from the Middle East and other nearby countries. Recent attacks on ships in the Red Sea raises the risk of longer shipping time and higher costs, which puts margins of Indian refiners under pressure.

Oil Technical Analysis: US is acting as “Big Brother”

Oil prices are erasing gains from Wednesday and slipping below $74. The recent API numbers are showing that the US is trying to counterbalance any sudden blip in demand by relentlessly pumping Oil and dumping it on the market, in order to keep Oil prices muted. Outstanding question at the moment is of course how long this tug-of-war between the US and OPEC+ can continue. 

On the upside, $74 is still holding some importance, although the level has become very chopped up. Once back above there, $80 comes into the picture. Although still far off, $84 is next on the topside once Oil sees a few daily closes above the $80 level. 

Below $74, the $67 level could still come into play as the next support level to trade at as it aligns with a triple bottom from June. Should that triple bottom break, a new low for 2023 could be close at $64.35 – the low of May and March – as the last line of defence. Although still quite far off, $57.45 is worth mentioning as the next level to keep an eye on if prices fall sharply. 

US WTI Crude Oil: Daily Chart