Crude oil prices continue to make gains today - both WTI and Brent crude are currently slightly higher. Yesterday, the commodity was up sharply thanks to fears of US military action in Syria following Trump's tweets. Looking at other assets, US Treasury bonds and gold prices also surged yesterday (a sign of rising geopolitical risks). Later in the day, crude oil prices gave up some of their gains after Russian ships left a key Syrian port and FOMC minutes suggested continue rate hikes this year.
Turning to data, US EIA figures showed much higher-than-expected crude and gasoline inventories. US crude production also rose to a fresh high of 10.53m barrels per day. While US figures suggest that crude supplies remain ample, geopolitical risks are overshadowing supply/demand dynamics for now. Looking at technical conditions, both Brent and WTI closed above their previous January and March highs. This is a sign that the trend remains bullish, and crude oil prices may continue rising. Later today, will will upgrade our short-term outlook to bullish, while our medium-term outlook remains bullish.
WTI is currently trading above $66.80. Brent crude is currently above $71.90.
Looking at US crude oil stocks, the most recent EIA figures (April 11) showed rising crude oil stocks and rising gasoline inventories. Crude oil inventories were significantly higher than estimates (+3.3m vs. -0.2m expected). Gasoline stocks were up (+0.5m vs. -1.1m expected) while distillate stocks (-1.0m vs. 0m expected) were down. Looking at reactions in markets, crude oil prices continued to accelerate following the EIA report.
As crude oil runs out of steam, we are now neutral on the commodity. Note that both WTI and Brent are trading within normal conditions. This is based on technical indicators on the daily chart.
As crude oil rebounds, we are upgrading the commodity to bullish in the medium-term. Looking at various technical indicators on the weekly chart, note that both WTI and Brent are trading within normal conditions.