Oil Price Fundamental Daily Forecast – EIA Report Expected to Show 3.0 Million Build

Traders continue to digest the impact of the Venezuela sanctions with some concerns on both ends. Right now, it’s being treated as a supply disruption. Anytime that term is mentioned, short-covering ensues.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading flat-to-higher on Wednesday, continuing to be underpinned by worries over supply disruptions following U.S. sanctions on Venezuela’s oil industry, but capped by concerns over rising U.S. production and lower demand due to the weakening global economy. The markets are also being supported by a private report that showed a smaller than expected weekly inventories build.

At 08:59 GMT, March WTI crude oil futures are trading $53.40, up $0.09 or +0.15% and March Brent crude oil is at $61.35, up $0.03 or +0.05%.

Venezuelan Sanctions

On Monday, Washington announced export sanctions against Venezuela’s state-owned oil firm PDVSA, limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products.

The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day (bpd) of crude oil to the United States.

American Petroleum Institute (API) Weekly Report.

The American Petroleum Institute (API) reported a crude oil inventory build of 2.098 million barrels for the week-ending January 25. Analysts were looking for a build of 7.97 million barrels.

The API also reported a build in gasoline inventories for the week-ending January 25 in the amount of 2.2 million barrels. Analysts had priced in a build of 4.050 million barrels. Distillate inventories increased last week by 211,000 barrels, compared with an expected draw of 617,000 barrels.


Traders continue to digest the impact of the Venezuela sanctions with some concerns on both ends. Right now, it’s being treated as a supply disruption. Anytime that term is mentioned, short-covering ensues.

According to reports, so far the sanctions have been mostly disruptive for refiners on the U.S. Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases of crude oil and sales of refined products. However, investors are concerned about pipeline capacity bottlenecks in Canada.

Bearish traders feel that Venezuelan export volumes will not be eliminated from the market, but rather rerouted to other countries, with China and India likely to pick up the slack at great discounts.

Later today at 15:30 GMT, the U.S. Energy Information Administration Weekly Inventories report is expected to show a build of 3.0 million barrels.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.