US Crude Oil Price: No Sign Yet of Recovery Faltering
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US crude oil price, news and analysis:
- The price of US crude oil is continuing to benefit from news that Saudi Arabia is trying to boost prices by making additional cuts to its exports.
- Its underlying strength has been emphasized by its limited reaction to news that US crude oil stocks fell less than expected in the week to January 4.
US crude oil rally continues
The price of US crude oil is continuing to climb, and could well rise further, on the back of an announcement Wednesday by Saudi Arabia that it will cut its exports in January by 10% compared with November. Saudi Energy Minister Khalid al-Falih said it will reduce its exports from eight million barrels per day to 7.2 million and that there will be a further cut of 100,000 barrels per day in February.
US Crude Oil Price Chart, Hourly Timeframe (December 21, 2018 – January 2, 2019)
Chart by IG (You can click on it for a larger image)
Emphasizing their underlying strength, crude oil prices have held up remarkably well despite data from the US Energy Information Administration showing that crude inventories fell by 1.7 million barrels in the week to January 4, compared with analysts’ expectations in a Reuters poll for a decrease of 2.8 million barrels.
Al-Falih also said he was confident that the cuts already promised by the Organization of the Petroleum Exporting Countries and its allies would be more than sufficient to balance the market but that he would not rule out calling for further action if that proved not to be the case.
Hopes of progress in the US-China trade talks are helping lift oil prices too, despite plentiful supplies from the US.
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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.