For the fourth consecutive time, crude oil prices climbed and even lingered near multi-month highs as market participants looked ahead for fresh weekly US stockpile data on Wednesday.
Read on below for FSMNews take on the movement of oil prices and commodities trading. With the oil up, does that mean the US dollar is down? Be informed by exploring more of FSM News’ updates on the currency market.
Oil Supply, Hopes for Bullish Data
At 15:30 GMT on December 21, 2016, the US Energy Information Administration (EIA) will publish its weekly report on oil inventories, amid analysts’ bets for a decrease of 2.5 million oil barrels. Gasoline supplies are seen to increase by 1.4 million barrels. Meanwhile, stocks of distillate that includes heating oil and diesel are expected to slide by 1.1 million barrels.
After the bell on Tuesday, the American Petroleum Institute (API) reported that US oil inventories had fallen 4.1 million barrels in the week ended December 16. This amount surpassed the forecasted loss of 2.4 million barrels, and also marked the fourth draw in the previous five weeks.
The report from the API also revealed that in gasoline stocks, there had been a decline of 2 million barrels, and distillates sank 1.5 million on the week.
This API data had raised hopes for market players that inventories will continue to fall and prices to rise with today’s EIA report. A huge catalyst for this event was also the previous agreement in the last OPEC meeting. In the said conference, members of the crude oil cartel had agreed to curb production by a combined 1.2 million barrels per day (bpd) beginning January.
This was OPEC’s first deal since year 2008. The recent arrangement was followed by an agreement from 11 non-OPEC producers, led by Russia, to pull back their stockpiles by 558,000 bpd.
Oil traders are waiting for additional confirmation on whether major crude producers, both OPEC and non-OPEC members, will follow through their pledge to limit oil production. Some traders remain doubtful, however, that the supposed curbs will be as significant as the market presently assumes.
In London, Brent oil for January delivery on the ICE Futures Exchange had hit a high of $55.86 per barrel today, hovering close to a 17-month peak of $57.89 in the week prior. As of writing this article, Brent is logged on $55.58 a barrel, up by 0.43% or 24 cents.
Meanwhile, crude oil futures for February delivery on the New York Mercantile Exchange is currently trading up by 0.68% or 36 cents to $53.66 a barrel on Wednesday’s trading session. Today’s intraday high is marked at $53.78, also points away from an estimated 18-month high of $54.51 hit last December 12.
Current resistance level for crude oil futures is marked at 54.47, while support is at 51.56. In the lack of fundamental factors due to the holiday period, investors can expect the technical support and resistance levels to become key price drivers today.
Should the data from the EIA prove to be bullish; dealers can take oil prices even higher today.
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