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Crude oil modestly higher as OPEC/Russia consider long-term deal

Crude oil daily update

BY DEB SHAW | 

Crude oil daily update

Crude oil prices are mostly higher today. Brent is slightly higher, while WTI is trading flat. While the commodity has been weighed down by US supply concerns in the past, crude oil has moved up sharply in the past few weeks. Geopolitics is the latest catalyst for the commodity, as tensions in the Middle East and the potential for a longer-term OPEC/Russia deal drives prices higher. According to Saudi Crown Prince Mohammed bin Salman, “we are working to shift from a year-to-year agreement to a 10-20 year agreement.” While oil producers agree "on the big picture", details remain subject to negotiation. Crude oil prices strengthened following the news, but recent price action has been more tempered.  

Looking at a price graph, the commodity has been unable to rise above its previous high (from late January). Given significant momentum, crude oil may be able to rise above $66/$70 (WTI/Brent) in the near future. Our short-term outlook and medium-term outlook on crude oil is bullish. 

WTI is currently trading above $65.40. Brent crude is currently above $70.20.

Looking at US crude oil stocks, the most recent EIA figures (March 21) showed falling crude oil stocks and falling gasoline inventories. Crude oil inventories were lower than estimates (-2.6m). Gasoline stocks were down (-1.7m) while distillate stocks (-2m) were also down. Looking at reactions in markets, crude oil prices strengthened following the EIA report.

Updated