Yesterday oil prices reversed after American Petroleum Institute (API) reported that US oil inventories fell by 2.4 million barrels to 459.7 million barrels last week . Stockpiles at delivery port Cushing, Oklahoma, fell 504,000 barrels and gasoline supplies fell 946,000 barrels.
WTI rose 1.3% to $45.92 compared to the opening price $45.31
After 5 consecutive weeks of decline, investors believe this may be the right time to catch the falling knife and buy up, especially after China’s stock market regained on government’s strong efforts yesterday.
Today oil prices continued to rise as the market awaits the offcial crude inventories from the Energy Information Administration (EIA). Currently WTI is trading at $46.28 at 1:40 pm GMT+7, up 0.7% compared with the opening price ($45.95).
Tonight 9:30 GMT+7 will have important information about oil reserves of EIA and ADP non-farm payrolls (7:15 GMT+7). Investors are expecting the EIA report to confirm whether the short-term uptrend in oil prices may remain or not. According to a survey by Platts, the oil reserves will decline by 1.6 million barrels, lower than the API report, but enough to support oil prices.
If ADP nonfarm payrolls were not positive, the dollar will go down, causing oil prices go in the opposite direction.
When excess gasoline supplies and full stockpiles of diesel and fuel in the ARA, the oil refineries in Asia and Europe may have to reduced capacity due to low profit margins, causing oil demand to go down. The emerging of Arab Saudi in refinery market make both crude and oil products oversupplied.
Many experts predict oil to plunge to $30, the right threshold that productions begin to cease. Anticipated temporary recovery will be hit by data on the US labor market this week.
Forecast: oil prices will run quite wildly because the market is confused about recent gains. WTI may rise again to $46.70, the 38.2 Fibo but is unlikely to break this resistance level as the fundamentals of supply and demand have not changed. The $45.00 area is closely ahead.