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  • EIA says  crude oil inventories fell by 10 million barrels in US.
  • Fears over global economic slowdown continue to weigh on crude oil.
  • Brent oil clings to gains above $60 handle.

After posting strong gains on Tuesday, crude oil prices stretched higher earlier today. With the weekly crude oil data published by the US Energy Information Administration (EIA) showing a sharp fall in the US crude oil inventories, crude oil prices extended their rally. The barrel of West Texas Intermediate touched its highest level in a week $56.70 and the barrel of Brent rose to $60.97.  

In its weekly publication, the EIA said crude oil inventories fell by 10 million barrels per day, compared with analysts’ estimate for a draw of 2.1 million barrels, and provided a strong boost to crude oil prices.

Risk aversion hurts crude oil

However, concerns over a global economic slowdown and its potential negative impact on the energy demand outlook continue to make it difficult for crude oil to continue to gather strength.

After inverting with the 3-month US Treasury bond yield for the first time in 12 years on Tuesday, the 30-year Treasury bond yield extended its slide and touched a fresh record low today, reviving fears over a recession in the US and forcing investors to stay away from risk-sensitive assets.  Furthermore, the data published from Germany on Tuesday confirmed the economic contraction in the second quarter.  

As of writing, the WTI was trading at $55.57, losing 0.13% on the day while the barrel of Brent was up 0.4% on the day at $60.30.

Technical levels