Forums » News and Announcements

Oil Price Fundamental Daily Forecast

    • 2108 posts
    January 19, 2021 1:00 PM EST
    U.S. West Texas Intermediate and international benchmark Brent crude oil
    futures are trading slightly better on Wednesday shortly before the
    regular session opening and the release of the governments weekly
    inventories report at 15:30 GMT.To get more news about WikiFX, you can visit wikifx official website.



      Crude oil prices finished higher for a sixth straight session on
    Tuesday after industry data showed a bigger than expected drop in
    inventories and investors downplayed rising new deaths and infections in
    the pandemic and their potential impact on future demand.



      At 10:46 GMT, March WTI crude oil futures are trading $53.38, up
    $0.14 or +0.26% and March Brent crude oil is at $56.68, up $0.10 or
    +0.18%. Both contracts are off their highs and in a position to form a
    potentially bearish technical reversal.



      Rising coronavirus cases are grabbing the headlines, but may not
    be having that great of an effect on crude oil prices. Prices may not be
    declining on the news, but we can‘t determine that it’s not limiting
    gains.



      We do know that prices are higher than they were when the impact
    of COVID-19 started to hit the U.S. economy last March although demand
    is still well off levels at that time. The divergence suggests that
    buyers are betting heavily that the virus will eventually be contained
    and the vaccines are going to work.



      American Petroleum Institute Weekly Inventories Report



      The American Petroleum Institute (API) reported late Tuesday a
    draw in crude oil inventories of 5.821 million barrels for the week
    ending January 8. Analysts were looking for an inventory draw of 2.266
    million barrels for the week.



      The API also reported a build in gasoline inventories of 1.876
    million barrels for the week ending January 8 – compared to the previous
    weeks 5.473-million-barrel build. Analysts had expected a
    2.695-million-barrel build for the week.



      Distillate inventories also saw another large increase of 4.433
    million barrels for the week, compared to last weeks
    7.136-million-barrel increase, while Cushing inventories fell this week
    by 232,000 barrels.



      Daily Forecast



      Prices are still be buoyed by Saudi Arabias offer last week to
    single-handedly and voluntarily cut another 1 million barrels per day
    off its oil production in February and March.



      In my opinion, buyers are reacting to this news as if there is no
    real downside risk because they believe OPEC+ will make adjustments to
    production to meet any significant demand changes, if necessary.



      Traders will have the opportunity to react to the Energy
    Information Administration (EIA) weekly inventories report at 15:30 GMT.
    It is expected to show a 2.7 million barrel drawdown.



      U.S. oil production held steady at 11.0 million bpd for the fourth
    week running, according to the latest data provided by the Energy
    Information Administration. This is still millions of barrels below the
    13.1 million bpd high reached in March 2020.