Oil Price Fundamental Daily Forecast – Bargain-Hunters Drive Prices Higher Ahead of EIA Report

Bargain-hunters are helping to drive U.S. West Texas Intermediate and Brent crude oil futures higher shortly before the release of the U.S. Energy Information Administration (EIA) report at 14:30 GMT. They came in early Wednesday after the market tested a short-term Fibonacci level at $57.64.

At 13:28 GMT, May WTI crude oil futures are trading $59.54, up $1.78 or +3.08% and June Brent crude oil is at $62.62, up $1.76 or +2.89%.

American Petroleum Institute Weekly Inventories Report

Prices were under pressure early in the session after the API reported on Tuesday a build in crude oil inventories of 2.927 million barrels for the week ending March 19. Traders were looking for a much smaller inventory build of 272,000 barrels for the week.

The API also reported a draw in gasoline inventories of 3.728-million barrels for the week ending March 19 – on top of the previous week’s 926,000-barrel draw. Analysts had expected a 1.186-million-barrel build for the week.

Distillate stocks saw an increase in inventories this week of 246,000 barrels for the week, after last week’s 904,000-barrel increase.

Demand Worries Continue

Germany, Europe’s biggest oil consumer, extended its lockdown to April 18, and Chancellor Angela Merkel urged citizens to stay at home for five days over the Easter holiday.

Worries over the pace of the recovery from the pandemic were also heightened after a U.S. health agency said the AstraZeneca Plc vaccine developed with Oxford University may have included outdated information in its data.

Short-Term Outlook

Perhaps helping to boost crude oil futures early Wednesday was a report that ten tankers carrying 13 million barrels of crude could be affected after a container ship that ran aground in the Suez Canal, blocking vessels passing through, oil analytics firm Vortexa said on Wednesday.

The approximate rate of backlog is about 50 vessels a day and any delays leading to re-routings will add 15 days to a Middle East to Europe voyage, Vortexa added.

If that’s the case then prices could retreat later in the day because officials are now saying the cargo container ship is on the move, indicating a resumption of traffic in the waterway, a shipping source and witness told Reuters.

Traders expect today’s EIA report to show a build of 1.4 million barrels.