One of the driving factors in the April CPI report was higher gasoline prices as crude hit $88 in early April, however that move continues to reverse with WTI crude now trading below $77.
In the past few minutes, WTI crude just touched below the March/May lows near $76.79. A close below that bottom would still need to get through the late-February lows at $75.78 and the $75.00 figure but there is something of a head-and-shoulders top in play and angst about OPEC. A break in the cartel might help to send oil back to the December lows near $68 and that's also the measured target of the H&S.
With this decline in oil, the Canadian dollar is under some pressure. USD/CAD is at the highs of the day, up 11 pips to 1.3658 after falling as low as 1.3592 after US CPI data.
The weekly US inventory data is due up at the bottom of the hour. The private data showed:
- Crude -3104K
- Gasoline -1269K
- Distillates +349KJ
- Cushing -601K
Expectations for the official report:
- Crude -543K
- Gasoline +537K
- Distillates +824K
