News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/0ZqB956gzL
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.64%, while traders in Wall Street are at opposite extremes with 72.03%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/U4iArvw7Al
  • LIVE NOW: Join Technical Strategist @MBForex for his Weekly Strategy Webinar to review the setups we're tracking into the open! - https://t.co/chKtG7ezG9
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.33% 🇯🇵JPY: 0.19% 🇪🇺EUR: 0.13% 🇳🇿NZD: 0.05% 🇨🇦CAD: 0.04% 🇦🇺AUD: -0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/8aD0rHNpKv
  • Weekly Strategy Webinar starting in 15mins on DailyFX!! https://t.co/lxd5fZ5LG7
  • Please join @MBForex at 8:30 EST/12:30 GMT for your weekly scalping webinar. Register here: https://t.co/VGr4ZK3QZ9 https://t.co/FGuM1EAoYH
  • BoE's Vlieghe reiterates view that inflation peak is likely temporary $GBP
  • Goldman Sachs lowers Q3 US GDP forecast to 8.5% from 9.5%
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-07-26
  • BoE's Vlieghe: Appropriate to keep the current monetary stimulus in place for several quarters at least, and probably longer. And when tightening does become appropriate, I suspect not much of it will be needed, given the low level of the neutral rate. #GBP @DailyFX
Crude Oil Prices Hit 2-Year Highs on Upbeat Demand Outlook, Falling Stockpiles

Crude Oil Prices Hit 2-Year Highs on Upbeat Demand Outlook, Falling Stockpiles

Margaret Yang, CFA, Strategist

CRUDE OIL PRICE OUTLOOK:

  • WTI traded modestly higher after hitting a two-and-half year high on Tuesday
  • Prices were bolstered by strong US economic data, an OPEC+ decision to lift output in July as well as a delay in US-Iran nuclear talks
  • Markets foresee a 2.27-million-barrel decline in crude inventories for the week ending May 28th

Crude oil prices extended higher during Wednesday morning APAC trade before pulling back slightly mid-day. Prices surged 1.46% a day ago and closed a hair beneath the $ 68.00 figure. Yet this still marked the highest level seensince October 2018. WTI prices have more than doubled from November of last year, boosted by revitalized demand as the global economy recovers from the pandemic. US crude inventories have been falling in the past few months, underscoring strong underlying demand.

OPEC+ gave a green light to a further increase production by 850k bpd in July, as agreed at a meeting in early April. The oil cartel painted a rosy demand outlook for the second half of this year, forecasting that global inventories could fall by 2 million bpd during the September to November period. Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said demand “has shown clearsigns of improvement”, boosting investor confidence.

Meanwhile, nuclear talks between Iran and the US have paused for now and an Iranian official said a deal is expected to be finalized in August. This alleviated concerns surrounding a potential near-term rise in output from the Middle Eastern country if a nuclear accord is revived.

More encouragingly, the ISM US Manufacturing PMI reading smashed market forecasts, underscoring economic strength. The reading came in at 61.2, exceeding a baseline forecast of 60.9 and marking the 12thconsecutive month of expansion. Demand, consumption and inputs registered strong growth compared to April, with supply shortages and labor constrains pointing to a strengthening price outlook.

US ISM Manufacturing PMI – May 2021

Crude Oil Prices Hit 2-Year Highs on Upbeat Demand Outlook, Falling Stockpiles

Source: Bloomberg, DailyFX

The Energy Information Administration (EIA) will report weekly inventories data later today. Markets anticipate a 2.27-million-barrel draw in stockpiles. A larger-than-expected decline may serve to underpin crude oil prices, whereas a smaller one or an increase would likely do the reverse (chart below). Total inventories have fallen to a three-month low of 484.35 million barrels, and this trend looks set to continue with the arrival of the summer driving season.

Crude Oil Prices Hit 2-Year Highs on Upbeat Demand Outlook, Falling Stockpiles

Source: Bloomberg, DailyFX

Technically, WTI decisively breached above a key resistance level at 66.50 (the 200% Fibonacci extension) this week, and thus opened the door for further upside potential. The overall trend remains bullish-biased, as suggested by the upward-sloped SMA lines. The MACD indicator is attempting to breach a downward trendline as well, showing that bullish momentum may be building.

The previous resistance - $ 66.50 – has now become an immediate support level.

WTI Crude Oil PriceDaily Chart

Crude Oil Prices Hit 2-Year Highs on Upbeat Demand Outlook, Falling Stockpiles

--- Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Comments section below or @margaretyjy on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES