Yahoo Finance Oil Price Fundamental Daily Forecast – Buying Pressure Could Weaken as Market Nears Major Resistance Levels
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Thursday as investors continue to build on the premise of tight supply and increasing demand. The buying is so strong that traders are shrugging off weaker U.S. economic data although a softer U.S. Dollar could be helping to fuel expectations of increased foreign demand.
At 14:45 GMT, December WTI crude oil futures are trading $72.66, up $0.77 or +1.07% and December Brent crude oil is at $76.03, up $0.64 or +0.85%.
Both WTI and Brent crude futures are trading on the bullish side of their July 6 tops, putting them in a position to possibly accelerate to the upside. On July 6, the December WTI futures contract hit a high of $72.61, but the near-term August futures contract was trading $76.98.
The question is, “Is there any reason to chase the $76.98 top?” The market is currently being supported by basically week-old data. Wednesday’s U.S. government report was based on data up to September 17. As the industry continues to recover from Hurricane Ida, supply could rise, but will it be enough to offset increased demand? If it is then we may have seen the bottom in crude oil supply in Wednesday’s report.
US Crude Stockpiles Fall to Lowest in 3 years, Gasoline Builds –EIA
U.S. crude oil inventories last week fell to the lowest in nearly three years while gasoline stockpiles rose, the Energy Information Administration said on Wednesday.
Crude inventories fell by 3.5 million barrels in the week to September 14 to 414 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.4 million-barrel drop. Inventories now sit at their lowest levels since October 2018, and that tightness, along with strong demand, has helped drive oil prices higher.
Weekly figures on refining activity and oil production showed a return to pre-hurricane activity. Crude production jumped 500,000 barrels per day in the week to 10.6 million bpd, as Gulf offshore facilities resumed operations, Reuters reported.
Refinery runs rose by 960,000 bpd in the last week, with utilization rates up 5.4 percentage points to 87.5% of capacity as refiners restarted key units.
Overall product supplied jumped as a result of 21.1 million bpd, and for the past four weeks, product supplied – a proxy for demand – averaged nearly 21 million bpd, roughly in line with pre-pandemic levels.
Undercutting the optimism, U.S. gasoline stocks rose by 3.5 million barrels to 221.6 million barrels, compared with expectations for a 1.1 million-barrel drop.
Distillate stockpiles, which include diesel and heating oil, fell by 2.6 million barrels versus expectations for a 1.2 million-barrel drop.
Net U.S. crude imports rose last week by 519,000 bpd, the EIA said.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.5 million barrels in the last week, the EIA said.
Daily Forecast
Despite Thursday’s rally, the buying looks a little tentative. Prices are at or close to the July top so I believe we’re going to start seeing some profit-taking. The recovery from Hurricane Ida is moving along quickly so I expect to see a rise in production that is faster than demand. This will lead to increased supply over the short-run.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
