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Crude Oil Prices testing 200-day MA ahead of API Inventory Report
US Crude Oil prices slid nearly 3%, settling at $64.00 ahead of API weekly crude oil stock data. The American Petroleum Institute (API) announced last week an unexpected jump in stockpiles of US crude of 3.66 million barrels, which caused a large daily drop.

Wednesday’s EIA report on crude oil inventories showed a massive 6.8 million barrel increase in the week through August 10. However, the market consensus for this week sees stockpiles falling by 2.719 million.

Separately, the broad based dollar strength and the impact of Trump’s trade war could seriously weaken global oil demand. The ongoing trade war between the US and China has the potential to hit global economic growth, which subsequently will diminish the demand for oil.

China is shifting its imports toward Iranian crude oil at the expense of US crude oil. Since the start of August when the Trump administration re-imposed sanctions on Iran, China has imported zero barrels of crude oil from the US. China remains the biggest buyer of Iranian oil and this will ensure the oil supply keeps flowing despite the sanctions.


LCG MT4, 21/8/2018

US light crude ended Monday’s trading session near the lowest levels seen in 9 weeks, also testing the key 200-day moving average, which can signal a turn in market sentiment toward oil.



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