Crude oil ended the day down yesterday and continues to sell off this morning. While news in the past 24 hours relating to crude oil has been limited, prices are falling as markets await US inventory data. As US crude output increases to record highs, the risk of a larger-than-expected inventory build up is weighing on crude oil prices. Weekly EIA data shows that US crude production is almost 9.7m barrels per day. Looking at average estimates for EIA figures, the consensus expects crude stocks to fall by 3.5m barrels. Given its status as the world's swing producer, US data is watched closely. Our short and medium-term outlook on crude remains bullish.
WTI is currently trading just above $57.10. Brent crude is currently above $62.10.
Looking at US crude oil stocks, the most recent EIA figures (November 29) showed falling crude oil stocks and rising refined inventories. Crude oil inventories were lower than estimates (-3.4m vs. -3m expected). Gasoline stocks were up (+3.6m vs. +1.4m expected) while distillate stocks (2.7m vs. +0.7m expected) were also up. Looking at reactions in markets, crude oil prices rose following the EIA report.
As crude oil has been rallying since early October, 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 trading within a normal range.