Crude Oil Prices Look to Inventory Data for a Lifeline

London (April 25)  Crude oil prices continued to decline, dropping to the lowest level in a month. A standout catalyst explaining intraday losses was not readily apparent but the broader narrative making the rounds on the newswires pointed to concerns about the inability of OPEC output cuts to boost prices in the face of swelling swing supply.

Sellers’ resolve will be tested as API inventory flow data crosses the wires in the hours ahead. Official EIA figures due the following day are expected to show a 1.6 million barrel drawdown. An API number that falls short of that may produce another down day whereas a larger outflow may offer prices a lifeline.

Gold prices remained on the defensive having dropped after the first-round vote in the French presidential election. European shares have picked up on a positive lead from Asia, pushing bond yields higher and pressuring the yellow metalfurther. S&P 500 futures hint at more of the same as Wall Street comes online.

The move lower may be capped if US economic data pours cold water on rate hike bets however. New home sales and consumer confidence report are on tap, with weakening expected on both fronts. US data outcomes have deteriorated relative to forecasts in recent weeks, warning of elevated downside surprise risk.

Source: DailyFX