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Oil Price Fundamental Daily Forecast – OPEC to Debate Extending or Deepening Supply Cuts

By:
James Hyerczyk
Updated: Sep 20, 2017, 06:40 UTC

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled slightly lower on Tuesday ahead of inventories reports from the American

Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled slightly lower on Tuesday ahead of inventories reports from the American Petroleum Institute and the U.S. Energy Information Administration.

November WTI Crude Oil settled at settled at $50.28, down $0.07 or -0.14% and December Brent Crude oil closed at $55.15, down $0.10 or -0.18%.

West Texas Intermediate Crude Oil
Daily November West Texas Intermediate Crude Oil

Both reports are expected to show a build in U.S. crude inventories as imports resume and refineries were still restarting after a recent shutdown in the Texas Gulf Coast region due to Hurricane Harvey.

Despite the slight setback, the market continued to remain supported ahead of Friday’s meeting between OPEC and non-OPEC producers. They are expected to reach a decision on whether to extend the supply cut program beyond March and to deepen the cuts.

Brent Crude
Daily December Brent Crude

Forecast

Crude oil traders showed little response to late Tuesday’s American Petroleum Institute’s weekly inventories report. The report showed that U.S. crude supplies climbed by 1.4 million barrels for the week-ended September 15.

The API report also showed that gasoline inventories dropped 5.1 million barrels, and distillate inventories declined by 6.1 million barrels.

The U.S. Energy Information Administration’s weekly inventories report is expected to show a 2.4 million barrel increase. Gasoline inventories are expected to decline by 800,000 barrels and distillate supplies are expected to show a draw of about 1 million barrels.

Prices continue to be supported by last week’s report from the International Energy Agency which lifted its 2017 demand outlook. OPEC also estimated an increase in demand.

Early Wednesday, traders are showing almost no reaction to comments from Iraq’s oil minister who said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut.

While options being considered by OPEC and other producers include an extension of cuts in output by months, it is premature to decide on what to do beyond March, when the agreement expires, Iraqi oil minister Jabar al-Luaibi told an energy conference in the United Arab Emirates on Tuesday.

The key level for November WTI traders remains $50.30. Trader reaction to this price will tell us whether traders are buying strength or playing for a pullback into support.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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