The volume of crude arriving in China, the world’s largest crude importer, is set to slow in September after rising for five straight months as its refiners gradually digest bloated inventories. Production cuts led U.S. gasoline inventories to fall at a “manic” pace in the past two months.
WTI crude has come under pressure “after U.S. refiners earmarked a long list of maintenance closures over the coming months that will no doubt impact demand for crude oil. Due to shutdowns ahead of Hurricane Laura, U.S. refinery utilization rates fell by 5.3 percentage points to 76.7% of total capacity, the EIA said.
On Nymex week ahead it is expected that Crude oil may post further correction where support is seen near $35.40 and resistance is seen near $46.00. For next week we may witness correction in crude oil where it may take support near 2720 and face resistance near 3380.
U.S. natural gas has completed the correction in the short term. Some of the cooler-than-normal weather after heavy rains from Laura turned a bit warmer, providing support to the market.
The reaction to the EIA report suggests traders read the numbers as neutral. However, the 35 Bcf build marks the second week that it was lower than the week before and this indicates that supply and demand is tightening. This could be enough to send prices higher into the close if traders decide to ignore warnings about LNG demand. For next week Natural gas may trade within the wider range of 170-210.
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