WTI edges toward $40 again after larger than expected API draw

• WTI has been on a rollercoaster on Tuesday and trades just under flat.
• Crude stocks fell by 8.156mln barrels according to the American Petroleum Association. 

It’s not been the best day despite some bullish fundamental news for WTI. Just recently the American Petroleum Association reported a draw of 8.256mln barrels in the latest weekly reading. Elsewhere inventories at Cushing Oaklahoma rose 0.164 mln., gasoline stocks fell 2.459mln and distillate stocks rose 2.638mln. Tomorrow the market will get the latest weekly readings from the US Energy Information Administration and this could confirm the drawdown in inventory levels.

In fundamental news, Saudi Arabia and the rest of the OPEC nations seem to have over complied with the output cuts agreed by the OPEC+ group. The output from the cartel hit its lowest point in two decades as the 13 nations pumped 22.62 million barrels per day on average in June.

Spot WTI 1-hour chart

The hourly chart below shows the price heading back up to the psychological USD 40 per barrel mark. It looked like the price was about to break lower earlier in the session but the news has helped it recover somewhat. If the level is conclusively broken then the high on the chart of USD 41.64 per barrel could be tested. 

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