Crude Oil Traders in a déjà vu Pattern, on Market Direction

Brent crude price remained below $45, a key resistance level, as crude oil traders remained relatively on the sidelines during this trading session.

Major Crude oil producers’ status quo seems to be maintaining their current crude oil production despite the resurgence of the COVID-19 pandemic around the globe.

Although the Saudi’s recently had discussions with Africa’s largest oil producer Nigeria’s at the highest level on Nigeria’s commitment in complying with its quota, in order to keep the price of oil relatively stable.

It’s been a challenging period for crude oil traders trying to predict the direction of the energy derivative, other than to conclude that demand concerns remain tethered to the hip of the COVID-19 fears as OPEC returns 1.5 million barrels per day this month.

However Crude Oil bulls remained upbeat after the US Energy Information Administration (EIA) report showed signs of recovery on energy demand.

The EIA reported d gasoline inventories s had dropped by 3.3 million barrels in the previous week versus a modest fall of about 700,000 barrels.

Gasoline output last week dropped by 9.4 million barrels per day from 9.6 million barrels per day a week earlier.

Distillate fuel stockpiles gained 200,000 barrels in the week to August 14, after a 2.3-million-barrel drop estimated for the previous week.

Distillate fuel production averaged 4.7 million barrels per day versus 4.8 million barrels per day for the previous week.

Indeed, that should alleviate some market concerns around the pace of product demand rise, especially around the critical gasoline metrics where a “surprise draw” is always most welcome.

However, the predominant theme in oil markets is the dramatically falling level of crude oil volatility.