Oil Price Fundamental Daily Forecast – API Report Expected to Show 1.1 Million Barrel Build

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower early Tuesday after giving up earlier gains. The initial strength was fueled by reports that Iranian oil exports this month have fallen from September ahead of U.S. sanctions against Tehran that are set to begin on November 4.

At 0738 GMT, December WTI Crude Oil futures are trading $71.35, down $0.26 or -0.36% and January Brent Crude Oil is at $80.20, down $0.23 or -0.29%.

According to the latest data from Refinitiv Eikon, Iran has exported 1.33 million barrels per day (bpd) to countries including India, China and Turkey in the first two weeks of October, down from 1.6 million bpd in September. In April, prior to President Trump’s announcement of the U.S. withdrawal from the multi-lateral nuclear deal with Iran, Iran exported 2.5 million bpd.

In other news, crude oil is being underpinned by geopolitical tensions caused by the disappearance of a Saudi Arabian journalist in Turkey. Turkish officials have alleged Saudi Arabian intelligence officers killed the journalist Jamal Khashoggi on October 2 at the Saudi consulate in Istanbul. President Trump has threatened “severe punishment” for the kingdom if the journalist is found to have been killed. Saudi Arabia has denied the allegation. Saudi Arabian officials have also said the nation would retaliate against any actions taken over the Khashoggi case.

Forecast

Another drop in Iranian exports should have been bullish for crude oil, but gains may have been limited by concerns over demand.

Traders are monitoring the geopolitical tensions over the disappearance of the Saudi Arabia journalist, however, so far the news has been limited to the political sphere. It could enter into the oil world if the Saudi’s are forced to retaliate by pulling crude from the market. This could turn into an extremely bullish event if it means less supply.

Traders will also be paying close attention to this week’s supply reports. Prices could be weighed by an increase in U.S. crude inventories.

On Tuesday, the weekly American Petroleum Institute (API) report is expected to show a build of about 1.1 million barrels in the week-ended October 12. This would mark the fourth straight week of increases. On Wednesday, the U.S. Energy Information Administration is expected to report a similar figure.

Both WTI and Brent futures are expected to remain rangebound over the near-term. Support is being fueled by concerns over a supply shortage. Worries over demand and rising U.S. inventories are providing the resistance.