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Oil Price Fundamental Daily Forecast – EIA Report Will Determine Today’s Direction

The direction of the crude oil market on Wednesday will likely be determined by trader reaction to the U.S. Energy Information Administration’s weekly inventories report, due to be released at 15:30 GMT. It is expected to show a 2.9 million draw down. If the report shows a build like the API report then look for a steep decline.
James Hyerczyk
WTI and Brent Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Wednesday shortly before the regular session opening. The pressure is coming from an unexpected build in U.S. crude oil inventory according to a private industry report. Uncertainty over U.S.-China trade relations is helping to keep a lid on prices.

At 11:25 GMT, February WTI crude oil is trading $56.73, down $0.41 or -0.69% and February Brent crude oil is at $63.84, down $0.50 or -0.78%.

American Petroleum Institute Weekly Inventories Report

The API announced late Tuesday an estimated crude oil inventory build of 1.41 million barrels for the week-ending December 4. Traders were looking for a 2.763 million barrel draw in inventory.

According to oilprice.com, “After today’s reported inventory move, the net inventory moves so far this year stand at a modest draw of 1.41 million barrels for the 50-week reporting period so far, using API data.”

The API also reported a build of 4.9 million barrels of gasoline for the week-ending December 4, compared to analyst expectations of a build in gasoline inventories of 2.533 million barrels for the week.

Distillate inventories saw a large build of 3.2 million barrels for the week, while Cushing inventories fell by 3.5 million barrels.

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Goldman Sachs Sees Higher Oil Prices in 2020

Goldman Sachs lifted its crude oil price forecast for 2020 on the grounds that OPEC’s deeper production cuts will help the market avoid oversupply, Bloomberg reports, citing and emailed report from the investment bank.

Goldman said it now expected Brent crude to average $63 per barrel in 2020, with West Texas Intermediate seen at $58.50 per barrel. The so-called long-term anchor price for Brent was set at $55 per barrel, with WTI pegged at $50 per barrel.

Saudi Aramco Shares Surge 10% as Historic IPO Begins Trading

CNBC is reporting that Saudi Aramco, the world’s largest initial public offering (IPO), surged past expectations as it debuted on the country’s stock exchange on Wednesday morning.

Shares of the state-owned oil company rose to 35.2 Saudi Riyals ($9.38) from 32 Riyals in early deals in Riyadh, up 10% and hitting their daily limit. The price gives it a valuation of $1.88 trillion and makes it the largest listed company in the world, comfortably ahead of Microsoft and Apple.

Daily Forecast

The direction of the crude oil market on Wednesday will likely be determined by trader reaction to the U.S. Energy Information Administration’s weekly inventories report, due to be released at 15:30 GMT. It is expected to show a 2.9 million draw down. If the report shows a build like the API report then look for a steep decline.

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