Oil Price Fundamental Daily Forecast – API Report Expected to Show 1.3 Million Barrel Drawdown

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower at the mid-session and ahead of the release of the American Petroleum Institute (API) weekly inventories report at 20:30 GMT.

The selling pressure is being driven by concerns over supply after the Suez Canal opened up after it was closed for about a week following the grounding of a supercarrier.

At 16:23 GMT, May WTI crude oil futures are trading $60.73, down $0.83 or -1.35% and June Brent crude oil is at $64.28, down $0.64 or -0.99%.

Traffic is Flowing in the Suez Canal

Reuters reported that ships were moving through the Suez Canal again on Tuesday after tugs refloated the giant Ever Given container carrier, which had been blocking a narrow section of the passage for almost a week, causing a huge build-up of vessels around the waterway.

Traders Shift Focus to Thursday’s OPEC+ Meeting

With concerns about a shortage of physical supplies abating, the market is turning its focus to Thursday’s meeting of OPEC and its allies including Russia in Vienna, collectively known as OPEC+.

OPEC+ will discuss whether to keep in place curbs on output that have kept millions of barrels a day off the market to support prices, a strategy that has largely worked since October 2020.

Additionally, Saudi Arabia is prepared to accept an extension of the production cuts through June, and is ready to prolong voluntary unilateral curbs amid the latest wave of coronavirus lockdowns, a source briefed on the matter said on Monday.

Bearish Factors

China is ignoring U.S. and United Nations sanctions and importing higher amounts of Iranian oil, according to traders and analysts. China may receive as much as 1 million barrels a day this month in imports from Iran passed off as crude from other origins.

In Europe, rising numbers in a third wave of infections are alarming authorities, with France’s Finance Minister Bruno Le Maire saying “all options are on the table” to protect the public.

Daily Forecast

The API will release its weekly crude oil inventories report at 20:30 GMT. The report is expected to show a 1.3 million barrel drawdown.