Trading news

Crude Oil Rises on API Inventory Draw, Awaits EIA Report



Crude oil futures contracts for February maintained its bullish momentum as price edged higher towards $53.77 on Tuesday before giving up some of the gains but still closing with gains at $53.51. The bullish close comes after prices closed nearly flat on Monday. Both the WTI crude oil and Brent crude futures posted gains which came despite the U.S. dollar trading stronger which hit a 14-year high this week.

The American Petroleum Institute’s (API) weekly crude oil inventory showed a larger than expected draw of 4.15 million barrels. This was higher than the forecasts of 2.5 million. API’s report comes after last week’s Energy Information Administration (EIA) reported a draw of 2.6 million barrels for the previous week.
https://www.orbex.com/blog/wp-content/uploads/2016/12/1-EIA-Inventory-Report.png
EIA Inventory Report (-2.6 million barrels/day). Week ending Dec 14, 2016

Oil traders will be waiting for today’s Crude oil inventory report from the EIA which is forecast to show a drawdown of 2.4 million barrels, which comes after last week’s draw with the oil inventories now into 4-consecutive weeks of posting a drawdown. However, on closer observation, there has been an increase in inventory in some of the key storage points in Cushing, Oklahoma.

Gasoline inventories were also shown to have posted a build up in the past six weeks despite demand for road fuels falling during the winter season. But API’s reports on Gasoline inventories showed a modest decline of 1.96 million barrels. The API data also showed that crude levels at the Cushing Oklahoma increased by a modest 690k barrels lower than the expected 1.9 million barrels.

Oil markets are also lifted by the positive developments from OPEC which managed to get a commitment from non-OPEC suppliers to cut production. While that may offer some cheer, the news continues to be met with doubts on possible cheating on oil production quotas. However, for now, the markets are reacting positively to any comments from the OPEC and non-OPEC nations. Most recently, Russian energy minister, Alexander Novak was quoted by local media saying that Russia could extend production cuts beyond the first half of 2017 if need be.

Crude Oil – Technical Outlook

On the 4-hour chart, the technical outlook shows the potential for a downside correction towards the support at $49.20 – $48.80 handle. Price action has been in a steady uptrend ever since this resistance level was breached on November 30th with the gains coming off the OPEC deal to freeze oil production.

Crude Oil, 4-hour chart

Since then, after rising to highs above $52.00 Crude oil prices slipped back towards the $49.80 to form a lower high as price action resumed its bullish trend. Posting a fresh 52-week high near $53.94, oil prices posted another pullback forming a lower high before rallying higher. At the time of writing, Crude oil is seen trading below the previous lows at $54.00.

Failure to break out above the $54.00 handle could potentially signal a correction towards the $50.40 – $50.00 price level where support could be reestablished. Below this minor support level, oil prices could also slide towards the $49.20 – $48.80 support level that is yet to be challenged.

Therefore in the short term, watch for crude oil to break down below $52.80 region in which case, the price could extend its declines towards $50.40 – $50.00.

Wednesday, 21 Dec, 2016 / 8:15

Note: Company News is a promotional service of the Directory and the content isn't created by Finance Magnates.

Source : https://www.orbex.com/blog/2016/12/crude-oil-rises-api-inventory-draw-awaits-eia-report/

Trading news

 

Euro under pressure ahead of key ECB Monetary Policy decision – EUR/USD Market Outlook – 29/10/2020

With COVID-19 cases rising and several European countries applying new [...]

Posted on Thursday, 29 Oct, 2020 / 9:10 under

DOW suffered worst day since June as COVID-19 concerns escalate – DOW JONES Market Outlook – 29/10/2020

The Dow’s losing streak continued, plummeting more than 700 points as we [...]

Posted on Thursday, 29 Oct, 2020 / 9:09 under

Market Update: October 28

  BTCUSD DAILY Bitcoin made a volume reversal today.  The high [...]

Posted on Wednesday, 28 Oct, 2020 / 10:41 under