Crude oil prices are flat this morning after rising sharply last Friday. Looking at last week's COT report, long crude oil remains a popular trade and speculators have increased their bets on the commodity in anticipation of the upcoming OPEC meeting. OPEC supply restrictions are set to expire in March 2018, and the upcoming meeting may result in an extension. Following the Saudi monarch's landmark trip to Russia earlier this year, expectations for the upcoming OPEC meeting are high. After rallying last week, our outlook on crude oil in both the short-term and medium-term is bullish.
WTI is currently trading just above $56.70. Brent crude is currently above $62.40.
Looking at US crude oil stocks, the most recent EIA figures (November 15) showed rising crude oil stocks and falling gasoline inventories. Crude oil inventories were higher, despite estimates that expected falling stocks (+1.9m vs. -3.0m expected). Gasoline stocks were up (+0.9m vs. -1.5m expected) while distillate stocks (-0.8m vs. -1.2m expected) were down. Looking at reactions in markets, crude oil prices fell following the EIA report.
As crude oil rebounds on OPEC expectations, we are upgrading the commodity to bullish. Note that both Brent and WTI are now trading within a normal range. This is based on technical indicators on the daily chart.
As crude oil rebounds on OPEC expectations, we are upgrading the commodity to bullish in the medium-term. Looking at various technical indicators on the weekly chart, both Brent and WTI are looking overbought.