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Crude oil daily update for 8th November 2017

BY DEB SHAW | 

The crude oil rally appears to have run out of steam, with both WTI and Brent crude oil trading sideways yesterday and this morning. While our short-term outlook on crude remains bullish, this comes with the caveat that crude is looking fairly overbought. Recent API data showed yet another draw for crude oil stocks, however the draw was lower than estimates (-1.6m vs. -2.9m actual). Falling crude stocks have been powering the crude oil rally since last summer as demand growth continues to run ahead of supply growth. Earlier this week, crude oil strengthened sharply following news from the Middle East. There have been reports of a political purge in Saudi Arabia, while the country has accused Iran of inciting war as Yemen-based forces launched a missile towards Riyadh. 

WTI is currently trading just above $56.90. Brent crude is currently above $63.50. 

Looking at US crude oil stocks, the most recent EIA figures (November 1) showed falling crude oil stocks and gasoline inventories. Crude oil inventories fell, but were higher than expectations (-2.4m vs. -2.5m expected). Gasoline stocks were down (-4.0m vs. -1.6m expected) and distillate stocks (-0.3m vs. -2.1m expected) were also down. US crude inventories have been falling for the past few weeks. Looking at reactions in markets, crude oil prices fell following the EIA report.

Updated 
Outlook
Bearish

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