2020-09-02 • Updated
Oil prices are steadily growing as crude stockpiles have been declining for six weeks.
According to the report of the American Petroleum Institute, crude inventories declined by 6.36 million barrels last week, marking the reduction of oil supply. At the same time, manufacturing reports from China and the USA came out better than analysts expected, which in turn should positively impact the overall consumption and oil demand as well. However, investors have doubts that demand may drop in a few next months as China is planning to cut oil imports after a buying binge earlier this year.
“There is not a lot of meat on the bone right now to drive the market convincingly higher above $45,” said Stephen Innes chief market strategist at AxiCorp. He added that future recovery is still highly uncertain. Nevertheless, analysts from Fitch Solutions consider that oil-consuming may recover faster than the oil supply and, therefore, lead to higher oil prices in the near term. Even more, Goldman Sachs claimed Brent crude to reach $65 a barrel in the third quarter of 2021 due to the wide availability of the Covid-19 vaccine, which will boost oil consumption.
Returning to the issue of oil supply, Hurricane Laura led to a 53% contraction of the oil production in the Gulf of Mexico. In addition, analysts foresee that Venezuela’s oil supply may even drop to zero by 2021. IHS Markit has assessed that the country is generating around 100 000-200 000 barrels every day, and these numbers are declining. That also helped to reduce the oil glut. Elsewhere, it is said that Venezuela may not be capable to withstand the current pressure of all the rigors: record low oil prices, US sanctions, and economic downturn.
The golden cross has appeared on the WTI oil daily chart: the 50-day moving average (MA) has crossed the 200-day MA from the bottom up. It has created the bullish momentum. WTI oil prices have been already rising for 4 months in a row, but failed to stabilize above $43 so far. The move above $43.50 will open doors towards the psychological mark of $44.00 and then $45.00. Support levels are at the low of August 27 at $42.60 and at the low of August 21 at $41.60.
Follow crude oil inventories today at 17:30 MT time! If the report is better than expected, it will drive oil prices up. Otherwise – down. Stay tuned!
Brent crude futures is maintaining stability this Friday, with traders awaiting an OPEC+ meeting that might lead to further supply cuts. Brent crude was down 8 cents at $81.34 a barrel, following a 0.7% drop in the previous session.
China has issued new oil product export quotas to allow oil companies to send surplus barrels overseas, particularly Sinopec, which has the highest volume among quota holders. While the exact quota volume remains undisclosed, oil companies are forecasted to export approximately 3.5 million metric tons of clean oil products in September, a 10% increase from August.
Thanks to the incredible advancements in horizontal drilling and fracking technology, the United States has experienced a mind-blowing shale revolution. They've become the heavyweight champion of crude oil production, leaving Saudi Arabia and Russia in the dust. They even turned the tables and became net exporters of refined petroleum products in 2011.
The energy industry has undergone several major changes in the XXI that are becoming increasingly apparent…
In the dynamic world of financial trading, understanding the nuanced relationship between the Federal Reserve's key interest rates and Bitcoin can be a game-changer…
As the US Non-Farm Payrolls (NFP) take center stage, this month's data gains special attention, particularly after the unemployment rate took a concerning turn in the previous month. The US ADP Employment Change reveals a significant decline, with the economy adding 298K new jobs...
FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.
Your request is accepted.
A manager will call you shortly.
Next callback request for this phone number
will be available in
If you have an urgent issue please contact us via
Live chat
Internal error. Please try again later
Don’t waste your time – keep track of how NFP affects the US dollar and profit!
|
