Crude oil is mostly flat this morning after ending the day flat yesterday. While the commodity started the day stronger yesterday, crude oil prices fell after an oil worker strike was called off in Nigeria. In recent days, prices have been supported by the shutdown of the Forties pipeline in the North Sea. Oil stocks continue to fall thanks to OPEC's voluntary supply cuts. According to Reuters, global inventories fell by 61m barrels to 5.48b barrels in October. For now, the crude oil bull market remains supported by underlying fundamentals. As we have written before, the market is focused on growing US supply in 2018 which threatens to upset the status quo. Our medium-term outlook on crude remains bullish.
WTI is currently trading just above $57.40. Brent crude is currently above $63.50.
Looking at US crude oil stocks, the most recent EIA figures (December 13) showed falling crude oil stocks and rising gasoline inventories. Crude oil inventories were lower than estimates (-5.1m vs. -4m expected). Gasoline stocks were up (+5.6m vs. +2.3m expected) while distillate stocks (-1.4m vs. +1.2m expected) were lower. 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 both Brent and WTI are trading within a normal range.