EIA Data Supports Crude
Oil prices are starting the day on a softer footing with the crude futures market cooling from yesterday’s highs. Crude rallied yesterday on the latest EIA inventories update recording an unexpected draw in commercial stockpiles. Inventory levels dipped by around 1-million barrels, extending the decline from the prior week’s huge 9-million-barrel deficit and falling below expectations for a 1-million-barrel increase.
Supply Concerns
While not a major surprise the data was enough to feed into bullish crude sentiment and help lift prices to their highest levels of the week. The wider backdrop for crude has seen traders concerned over supply levels given ongoing sanctions on Russian crude, disruptions in Venezuelan production and more recently disruptions in Kurdish exports too. Crude prices are around 4% higher off the weekly lows and have continued to advance despite a stronger US Dollar.
Russia-NATO Fears
Concerns around Russian provocation of NATO remain a big bullish driver too. Recent Russian incursions into US airspace and increasingly hostile rhetoric from EU leaders and recently President Trump, are keeping investors on edge. While still seen as an outside scenario, the prospect of any direct Russian-NATO confrontation is keeping rude prices underpinned for now with the market likely to move higher in response to news of any furtehr such incidents or any escalation of Russian-Ukraine violence.
Technical Views
Crude
The market is back above the 63.83 level now and while this level holds as support, focus is on a continuation higher towards the 67.45 level next with a break there opening a test of 72.61 as the higher bull objective. Momentum studies are mildly bullish here but still lacking conviction. If we turn lower again, 57.41 is the level to watch.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.