Crude Oil Bulls Out of Gas on API Data

Brent crude and West Texas Intermediate crude, two major leading oil benchmarks saw their value plummeting as high as 0.9% at the pre-open of the London trading session.

Oil bears are riding on the momentum after the American Petroleum Institute data showed the world’s largest economy oil inventories gained last week, thereby taking the oil bulls off guard amid distillate stockpiles dropping by about 6 million barrels, revealing oil bulls high sensitivity to any fundamental printing a build of any kind, as fears strengthen on bias that crude oil market demand has peaked.

On the supply aspect, the biggest challenge oil traders are dealing on the already fragile energy market is nothing seems to be working now. Although the popularly known oil cartel group, OPEC is trying hard within its statutory powers to extend oil production cuts, the upsurge in COVID-19 cases has further complicated the situation.

That has partly as seen on the recent price action , printing how Brent crude bulls suffer from exhaustion arbitrarily ,whenever it tried to break above the $43.15 critical resistance level, amid the falling U.S dollar.

This further means that, the fragile energy market, under these prevailing circumstances is likely to see more downward pressure given enough time.

Until the global economy begins to run at optimal capacity, it would be absurd for oil traders to be bullish in the long term, although the recent macro on news about AstraZeneca’s highly rated COVID-19 vaccine scheduled to resume as early as this week, might limit the oil bears from breaching below $40/barrel at least in the near term.