Crude oil prices remain flat this morning. Yesterday's EIA data, while better than consensus estimates, was not as bullish as the API data announced earlier this week. Crude oil stocks continue to fall while refined product inventories (gasoline and distillates) are rising. US crude production also fell sharply, reversing the recent trend of rising US crude supply. The significant reduction in crude stocks coupled with rising refined product inventories may be the result of extreme cold weather in the US. Weather may also explain why US crude production fell last week. Following the winter season, seasonal factors are less likely to play a role for US crude data. Looking at technical indicators, both WTI and Brent crude oil remain at bullish extremes. Our short-term and medium-term trending indicators continue to suggest a bullish trend.
WTI is currently trading above $63.50. Brent crude is currently above $69.10.
Looking at US crude oil stocks, the most recent EIA figures (January 10) showed falling crude oil stocks and rising gasoline inventories. Crude oil inventories were lower than estimates (-4.9m vs. -3.8m expected). Gasoline stocks were up (+4.1m vs. +2.6m expected) while distillate stocks (+4.2m vs. +1.4m expected) were also up. Looking at reactions in markets, crude oil prices were mixed following the EIA report.
As crude oil continues to make gains from pipeline closures, we are upgrading the commodity to bullish. Note that both WTI and Brent are looking overbought. 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, note that both Brent and WTI are looking overbought.