Today will see the release of the next weekly report on U.S. crude oil inventories from the Department of Energy's Energy Information Administration. The American Petroleum Institute has already released its data, and it showed a more than twofold decrease in inventories (last week it was -0.640 million barrels, this week -1.455 million). At the same time, the forecast estimate was for an increase in stockpiles.
The government data estimated last week's inventory change at -2.33 million barrels. If the actual new stockpiles are even lower, it will provide optimism for oil prices, which are already in the zone of strong technical support.
In addition, retail gasoline prices in the U.S. will rise in the coming weeks as new tariffs imposed by President Donald Trump's administration increase the cost of energy imports. The downside of Trump's protectionist trade policies, which are intended to boost the U.S. economy, is that they could lead to higher costs for consumers instead of GDP growth.
According to fuel distributor TACenergy, tariffs on Canadian crude oil have already led to a sharp rise in wholesale gasoline prices in the northeastern U.S., a region that relies heavily on Canadian supplies of gasoline, heating oil, and diesel.
Retail fuel experts say the increase will soon be felt at New England gas stations and could add 20 to 40 cents per gallon to the price. The retail price of gasoline in New England hovered around $3 last week, according to the Energy Information Administration.
Refiners that use Canadian crude as their primary source will likely see higher costs for imported materials, as will their consumers. Refineries that use Canadian crude may switch to lighter, low-sulfur crude, which could lead to higher U.S. West Texas Intermediate oil futures and global low-sulfur Brent crude prices.
Other regions that rely heavily on crude oil imports from Canada and Mexico will also soon see fuel prices rise, experts said. The U.S. imports about 4 million barrels per day of Canadian crude, 70% of which is refined at Midwest based facilities specifically designed to process Canadian oil. The U.S. also imports more than 450,000 barrels per day of Mexican crude, mostly for refineries concentrated along the U.S. Gulf Coast. In parts of the Midwest, gasoline prices could rise 10 to 15 cents over the next few weeks, which would push crude oil prices higher.
As noted previously, there is an unclosed gap at the level of 72.25 above current Brent prices. A corrective return of Brent to this level is likely to happen.
The overall recommendation is to keep selling Brent oil.
Profit could be taken at 72.25. A stop loss could be set at 69.0.
The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, does not exceed 1% of your deposit.
This content is for informational purposes only and is not intended to be investing advice.
