Looking at global crude oil benchmarks, both WTI and Brent crude oil are flat this morning. Looking at news, Reuters is reporting that Kuwaiti oil minister Essam al-Marzouq said that OPEC will study an exit strategy before next June. At OPEC's last announcement, the cartel kept the door open to an early exit if crude oil markets overheat in 2018. The agreement extended supply cuts by around 1.8m barrels per day to the end of 2018. Russia has been calling for a clear exit plan. As global demand growth continues to accelerate faster than supply this year, crude oil remains in a bull market. Our medium-term outlook based on trending indicators remains bullish.
WTI is currently trading just above $57.20. Brent crude is currently above $63.30.
Looking at US crude oil stocks, the most recent EIA figures (December 6) showed falling crude oil stocks and rising refined inventories. Crude oil inventories were lower than estimates (-5.6m vs. -3.5m expected). Gasoline stocks were up (+6.8m vs. +1.9m expected) while distillate stocks (+1.7m vs. +1.2m expected) were also up. 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 in the medium-term. Looking at various technical indicators on the weekly chart, both Brent and WTI are trading within a normal range.