Despite mostly bullish news, crude oil prices fell yesterday. According to a Reuters report, traders noted significant profit taking. Data from the American Petroleum Institute showed a much larger-than-expected draw in crude oil stocks (-7.4m vs. -4m expected). Gasoline and distillate stocks were only slightly higher than expected. Expectations for good EIA figures (to be announced later today) are rising as a result. In other news, the shutdown of the North Sea's Forties pipeline continues and helped Brent crude oil rise above $65 per barrel yesterday. As crude oil remains in a bull market, supply disruptions have helped the commodity this year. Our medium-term outlook based on trending indicators remains bullish.
WTI is currently trading just above $57.60. Brent crude is currently above $64.10.
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, note that Brent is looking overbought. WTI is trading within a normal range.