Weekly Crude Oil Review: WTI Futures Fall Sharply To Test Nine Month Low

24 Sep 2022 , 01:11 PM

WTI Crude oil futures tested a nine month low under $80 per barrel as the global equities melted. DOW tested around two year low and took a significant toll on risky assets. The US commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels from the previous week. At 430.8 million barrels, US crude oil inventories are still down about 2% below the five year average for this time of year, according to the EIA crude oil and petroleum weekly storage data, reporting inventories as of September 16, 2022. Meanwhile, European oil demand remains a big worry. The Eurozone economic downturn deepened in September, with business activity contracting for a third consecutive month. Although only modest, the rate of decline accelerated to a pace which, barring pandemic lockdowns, was the steepest since 2013. Forward-looking indicators, such as new order inflows, backlogs of work and future output expectations, point to the decline gathering further momentum in coming months. The seasonally adjusted S&P Global Eurozone PMI composite Output Index fell from 48.9 in August to 48.2 in September, according to the preliminary ‘flash reading based on approximately 85% of usual survey responses. The PMI has now registered below the neutral 50.0 level for three successive months, thereby signaling a continual economic decline throughout the third quarter, with the rate of contraction gathering pace in September to reach the fastest since January 2021.Powered by Commodity Insights