Crude oil recovers ahead of stock report
Head of Commodity Strategy
Summary: After yesterday's surprising API report the oil market's attention now turns to this afternoon's stock report from the EIA, which could provide another surprise.
Crude oil trades higher after the American Petroleum Institute (API) yesterday reported a surprise drop in US crude stocks of more than 4 million barrels, very different to the 3 million barrel increase expected by the EIA later today.
So far global oil demand remains robust despite data pointing to a global economic slowdown. A slowdown which negatively impacts demand growth could be the trigger that requires an extension of the current deal.
WTI crude oil has found support at $55/b after Monday’s Trump tweet helped trigger some profit taking. The trading range is currently defined by the rising wedge with resistance at $58.3/b and support at $53.8/b. A break below could spell trouble from a technical perspective and signal a return to support at $52/b followed by $50/b.
In the preceding five weeks up until February 12 the net-long managed to climb by 54k lots. Out of this relatively small increase some 50k lots were attributed to short-covering while just 4k lots came from fresh buying. This despite having seen WTI crude oil rally by 25% between December 24 and February 12.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.