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Kenny Fisher

Crude oil has posted slight gains on Wednesday. Currently, U.S. crude oil is trading at $52.93, up $0.84 or 1.60% on the day. Brent crude oil is trading at $58.88, up $1.22 or 2.12% on the day. In economic news, the American Petroleum Institute (API) weekly inventories report will be released at 21:30 GMT, with an estimate of a surplus of 3.3 million barrels. This will be followed by the Energy Information Administration (EIA) inventories report, which also has an estimate of a surplus of 3.3 million barrels.

U.S. Sanctions Boost Oil Prices

Oil prices have moved higher after the U.S. announced new sanctions on a Swiss subsidiary of Russian oil giant Rosneft for assisting Venezuela evade U.S. sanctions on its oil exports. The move is aimed at ramping up the pressure on Venezuelan President Maduro, whom the U.S. accuses of running an oppressive regime which has caused millions of Venezuelans to flee the country.  The move has reduced global oil supplies and lifted oil prices. U.S crude prices touched a high of 53.03 earlier on Wednesday, its highest level since January 31.

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Will OPEC Cuts Get off the Ground?

OPEC has been pushing hard for further production cuts in order to reduce supplies and boost prices. An advisory committee has proposed cutting supplies by 600,000 barrels per day, but OPEC is reluctant to implement the plan without Russia’s support. For its part, Russia has stayed mum, saying it is studying the proposal. Oil ministers of OPEC and non-OPEC countries will meet on March 6 and unless oil prices move higher, there will be strong pressure on the ministers to agree to a reduction in production.

Technical Analysis

There is support for WTI/USD at 51.50. This is followed by support at the key line of 50.00. On the upside, 53.00 was tested in resistance earlier in the day and is under strong pressure. This is followed by resistance at 54.50, with the 50-day EMA at 54.94.

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