Crude oil Daily Updates

07 May 2018

Crude oil prices continue to rise today - both Brent and WTI are currently registering gains. Last week, the commodity traded lower in the first half of the week and strengthened towards the end of the week. Crude oil prices were particularly strong last Friday during US trading hours. Today, the commodity pushed higher throughout Asian trading hours. 

Looking at crude oil headlines, the commodity is rising thanks to ongoing concerns regarding Venezuelan and Iranian supply. Venezuela's ongoing economic crisis has led to a continuous decline in crude oil production. The South American country's exports of crude oil have now fallen below comparable figures for Colombia for the first time in history. Turning to Iran, traders remain confident that President Trump is set to walk away from the nuclear deal on May 12. While speculator net positions appear to be falling (looking at the latest COT Report), recent moves in crude oil have been accompanied by relatively high trading volumes. 

In other data, the US rig count increased by nine to a total of 834 producing oil rigs. The figures are the highest since March 2015. Our short-term and medium-term outlook on crude remains bullish.  

WTI is currently trading above $70.20. Brent crude is currently above $75.30.

Looking at US crude oil stocks, the most recent EIA figures (May 2) showed rising crude oil stocks and rising gasoline inventories. Crude oil inventories (+6.2m vs. +1.2m expected) were higher than expectations. Gasoline stocks were up (+1.2m vs. -0.7m expected) while distillate stocks (-3.9m vs. -1.5m expected) were down. Looking at reactions in markets, crude oil prices weakened immediately following the EIA report.

Updated 
Short term outlook
Bullish

As crude oil makes gains, we are now bullish on the commodity. Note that both Brent and WTI are trading within normal conditions. This is based on technical indicators on the daily chart. 

Medium term outlook
Bullish

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. 

Updated