US crude turns lower ahead of EIA weekly report

US crude turned lower as the US market opened on Wednesday, after rising earlier on hopes for an improved US demand after the American Petroleum Institute showed in preliminary a larger-than-expected drop in US crude inventories, which comes ahead of the EIA official report.

US crude fell 1.9% to $39.08, after opening at $39.83, and hit an intraday high of $40.56.

The US crude gained 0.5% yesterday, posting the second daily gain, after the release of upbeat data on the Chinese economy.

The American Petroleum Institute (API) revealed yesterday in preliminary data the US crude inventories fell 8.2 million barrels during the week ending June 26, more than forecasts of a drop by 0.7 million barrels.

The total inventories fell to the lowest level since the week ending May 29 at 537 million barrels, in a positive sign of the demand and consumption levels in the US after easing the coronavirus lockdown.

While the US Energy Information Administration (EIA) will release today the official data on inventories and production levels in its weekly report, with forecasts for inventories to fall 0.9 million barrels.

As for the US production it rose 500,000 barrels to 11.0 million barrels per day during the past week, with expectations to continue rising for the second straight week.