Oil Price Fundamental Daily Forecast – Bullish Traders Hoping for Stock Market Recovery

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures finished marginally higher on Thursday, boosted by a recovery in U.S. stock markets and Saudi Arabia’s unexpected price hike in crude prices. However, a stronger U.S. Dollar helped limit gains.

Early Friday, the crude oil market is giving back some of the gains in reaction to the news that President Trump had ordered U.S. trade officials to consider an additional $100 billion in tariffs on China, escalating tensions with China.

At 0646 GMT, May WTI Crude Oil is trading $63.13, down $0.41 or -0.63% and June Brent Crude Oil is at $67.88, down $0.45 or -0.66%.

Based on the early price action, it looks as if the direction of the crude oil market today will be determined by investor appetite for risk.

Prior to the sell-off, crude oil was a rangebound market. Gains were being limited by concerns over rising U.S. production and the possibility of weaker global economic growth, but losses were being limited by supply-side issues amid a backdrop of falling inventories.

To recap the news this week, the Energy Information Administration reported a 4.6 million-barrel draw in U.S. crude inventories the week-ending March 30, compared with analysts’ expectations for an increase of 246,000 barrels.

Additionally, Saudi Arabia said on Thursday it would raise its official selling price for May crude for Asian customers. This news helped trigger yesterday’s short-covering rally because it was unexpected.

Finally, OPEC and its allies should keep the cuts to ensure healthy price levels as a way to boost investment in the industry and avoid a supply and price shock in the long run, Qatar’s Energy Minister Mohammed al-Sada told Reuters.

Since the counter-trend momentum was to the upside before Trump’s announcement and the early stock market sell-off, crude prices could recover today if U.S. equities mount a dramatic comeback rally similar to the one on Wednesday. Otherwise, the downside pressure will continue.