Oil prices broke out of a tight range on Thursday, September 9, and so sharply that it looked like a flash crash. Brent broke through the $71/bbl support level, shedding 2% during the trading day to $70.86, while WTI slipped below the $68/bbl support level, down 2.1% to $67.69/bbl.
The downturn was likely triggered by yesterday’s EIA report, which showed a drawdown in crude inventories that fell 3x short of the median consensus, down 1.53 mln bbl instead of 4.61 mln expected. News that China is releasing oil from a strategic petroleum reserve (SPR) to combat high gasoline prices also played into the hands of the bears.
Oil prices are on the rebound this morning after yesterday’s pullback, apparently on reports that oil production in the Gulf of Mexico is still struggling to recover from the aftermath of Hurricane Ida. In the upshot, Brent is trading 1.74% higher, firmly above $72/bbl, while WTI is up 1.17% above $69/bbl. Our Brent price forecast for today is in the range of $ 71-72/bbl.