US Crude Oil Price Rise Still Possible Once Consolidation Period Ends
Crude oil price, news and analysis:
- The price of US crude oil has shrugged off a demand by US President Donald Trump that OPEC cuts prices.
- With concerns persisting about oil flows from Iran, further strength cannot be ruled out.
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Trump fails to lower oil prices
The lack of response in US crude oil to a demand earlier this week by President Donald Trump that the Organization of the Petroleum Exporting Countries cut its prices has added to the evidence that a further move higher is possible once the current period of consolidation is over.
Writing on Twitter Wednesday, the US President said OPEC is doing little to help.
However, the market response was minimal given the continuing threat of US sanctions against Iran and a reported threat by the Iranians to close the Strait of Hormuz, which connects the Persian Gulf to the Gulf of Oman and is an important shipping route for oil.
US Crude Oil Price Chart, Daily Timeframe (Year to Date)
Trump’s problem is that spare output capacity in the oil market is limited, and US inventories of crude oil are still relatively low. Data released Thursday by the US Department of Energy showed stockpiles unexpectedly higher: up by 1.25 million barrels in the week to June 29 rather than the 3.54 million fall expected by analysts.
However, the rise was much smaller than the 9.89 million drop recorded the previous week and while crude prices fell on the news they soon moved off the day’s lows. The reaction in the oil price to the latest shots in the US-China trade war has also been limited, suggesting the market’s underlying strength remains intact.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.