Crude Oil Prices May Resume Their Advance
Crude oil price, news and analysis:
- US crude oil inventories rose by 1.9 million barrels in the latest week, sending oil prices lower.
- However, with supplies still tight, the upward price trend looks set to resume.
US oil inventories rise
Crude oil prices are a tad weaker Wednesday after news Tuesday that US crude stockpiles rose by 1.9 million barrels in the latest week, according to the American Petroleum Institute. That compared with forecasts of a 1.2 million drop and sent oil prices lower ahead of official US data due at 1430 GMT today.
However, the long-term uptrend looks set to resume as supplies remain tight, more than offsetting possible weakness in demand as the global economy slows.
US Crude Oil Price Chart, Daily Timeframe (November 27, 2018 – March 27, 2019)
Chart by IG (You can click on it for a larger image)
Venezuela’s output was disrupted this week after a large power blackout, and crude exports from the country have dropped sharply since the US decided in January to ban US refiners from buying Venezuelan oil. Supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies have supported prices too, as have US sanctions on exports from Iran. Disruptions in the US are supportive as well, and these factors will likely outweigh concerns about global growth that could reduce oil demand. Nearer term, the US Department of Energy data, due at 1430 GMT, are expected to show a fall of 2.5 million barrels in US oil inventories, compared with the prior week’s drop of 9.6 million.
However, the API figures suggest the fall could be even smaller and that there could even be an unexpected increase.
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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.