Crude oil is slightly higher today - both WTI and Brent are currently making gains. Yesterday, crude oil prices surged alongside improving risk sentiment. Following a recent higher-high, crude oil remains in a firmly bullish trend. While the commodity was under pressure following fears of a global trade war, tensions in the Middle East coupled with improving inventory figures have helped crude oil prices more recently.
Turning to the latest news, Reuters reported that Saudi Arabia is supportive of crude oil trading in the $80 - $100 barrel range. The comments suggest that OPEC's supply cuts are likely to remain in place. In the US, EIA figures showed that crude oil inventories fell by 1.1m barrels last week. While this was below estimates, fears of a supply glut are not yet panning out. As we have written before, concerns regarding Iranian supply (assuming Trump reinstates tariffs) is also helping crude oil prices. Our short-term and medium-term outlook on crude remains bullish.
WTI is currently trading above $68.70. Brent crude is currently above $73.80.
Looking at US crude oil stocks, the most recent EIA figures (April 18) showed falling crude oil stocks and falling gasoline inventories. Crude oil inventories fell (-1.1m vs. -1.4m expected). Gasoline stocks were down (-3.0m vs. -0.3m expected) while distillate stocks (-3.0m vs. -0.4m expected) were also down. Looking at reactions in markets, crude oil prices strengthened following the EIA report.
As crude oil makes gains, we are now bullish 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.