7.29 Wednesday 3️⃣ Crude oil
Strategy
1. Pay close attention to the EIA data at 22:30 tonight—if the figure is worse than expected and inventories build (reported value > -1.35 million barrels), crude prices face the risk of further downside; for WTI, watch the $77 support level below;
2. If EIA data is significantly below expectations (inventories plunge) or the situation in the Middle East suddenly escalates, shorts should be wary of the risk of a rapid rebound;
3. The Federal Reserve decision early in the morning is the second checkpoint; if the Fed turns hawkish, oil prices may face further pressure again.
News
API data: Inventories unexpectedly surged, with a red flag on the demand side
The API crude oil inventory data released early this morning shows that, for the week ending July 24, the U.S. API crude oil inventories changed by +3.296 million barrels, far higher than the previous value of +2.603 million barrels, while market expectations were -2.5 million barrels. Inventories not only failed to decline as expected, but instead surged even more than expected, which is a direct negative for crude oil fundamentals.
Tonight’s EIA: if the data again comes in with an unexpected inventory build, it will further pressure oil prices
At 22:30 tonight, the U.S. EIA weekly crude oil inventories for the week ending July 24 will be released. The prior reading was an increase of 2.01 million barrels, and the market forecast was a decrease of 1.35 million barrels. Investing.com’s EIA expectations are even more pessimistic—forecasting -1.70 million barrels.
Key logic: the API already saw an unexpectedly large build of 3.296 million barrels. If tonight’s EIA also records an upside surprise build, it will create a "double bearish" scenario with both API and EIA showing builds, further confirming the reality of weak demand; oil prices could then test lower levels. In addition, keep an eye on changes in Cushing inventories (prior: -0.674 million barrels) and strategic petroleum reserve inventories (prior: -5.057 million barrels).
Middle East situation: geopolitical risks have not fully eased
Although the U.S.-Iran temporary ceasefire has suppressed oil prices for now, the Middle East situation has not truly calmed down. On July 29, Iran launched multiple ballistic missiles at a U.S. military base located in Jordan, marking the first missile attack by Iran targeting U.S. bases in the region since the U.S. paused military strikes against Iran last Friday. Geopolitical uncertainty risk is still escalating and could reignite supply disruption concerns at any time, which is the biggest variable in the current crude oil market.
Federal Reserve: the second shoe drops tonight
In the early hours of July 30 at 02:00 Beijing time, the Federal Reserve FOMC will release its interest rate decision, followed by a monetary policy press conference by Fed Chair Waller. The market expects a high probability that rates will remain unchanged, but the key lies in the wording of the press conference—if Waller signals a September rate hike, a stronger U.S. dollar would impose additional downward pressure on U.S.-dollar-denominated crude oil.