Oil Price Fundamental Daily Forecast – EIA Report Expected to Show 3.6 Million Draw

International-favored Brent and U.S. West Texas Intermediate crude oil futures closed higher on Tuesday. Brent futures were supported by the Forties pipeline outage in the North Sea and the OPEC-led production cuts.

WTI futures were dragged higher by rising Brent futures and expectations that U.S. crude inventories fell for a fifth week. Gains were likely limited in both futures contracts due to concerns over rising U.S. production.

On Tuesday, March Brent Crude Oil settled at $63.40, up $0.49 or +0.78% and February WTI Crude Oil finished the session at $57.56, up $0.34 or +0.59%.

Forecast

Crude oil is being supported early Wednesday by expectations for a drop in U.S. crude inventories later today and by the ongoing shutdown of the North Sea Forties pipeline system.

At 0822 GMT, March Brent Crude Oil is trading $63.61, up $0.21 or +0.33% and February WTI crude oil is at $57.82, up $0.25 or +0.43%.

Later today at 1530 GMT, the U.S. government will report on its latest inventories figures. Late Tuesday, the American Petroleum Institute said that U.S. crude inventories fell by 5.2 million barrels in the week to December 15 to 438.7 million.

Gasoline inventories showed another build at 2.001 million barrels during the same time period, traders were looking for a build of 2.334 million barrels of gasoline.

Distillate inventories saw a draw this week, down 2.85 million barrels versus a forecast of a 1.327-million-barrel draw.

Crude oil prices are likely to continue to be supported today if the U.S. Energy Information Administration’s inventories report comes in at or better-than-expected. It is expected to show a 3.6 million barrel draw down.

Also providing support for the market will be the Forties outage. According to Bloomberg, it is expected to take between 5.5 million and 13 million barrels of oil out of the market before the repairs are complete.