FXEMPIRE
All
Ad
Corona Virus
Stay Safe, FollowGuidance
World
96,009,720Confirmed
2,049,348Deaths
68,629,984Recovered
Fetching Location Data…
Advertisement
Advertisement
James Hyerczyk
WTI and Brent Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are inching lower on Thursday as upbeat Chinese import data and U.S. crude oil draws were outweighed by surging cases in Europe and new lockdowns in China. A potentially bearish technical chart pattern is also limiting gains and encouraging investors to trim their bullish positions, setting up the market for its first correction in weeks.

At 13:40 GMT, March WTI crude oil futures are trading $52.59, down $0.37 or -0.70% and March Brent crude oil is at $55.47, down $0.59 or -1.05%.

Advertisement
Know where WTI Crude Oil is headed? Take advantage now with 

75% of retail CFD investors lose money

Early Support from Strong China Imports

Supporting prices, China’s total crude oil imports rose 7.3% in 2020 despite the coronavirus shock, with record arrivals in the second and third quarters as refineries expanded operations and low prices encouraged stockpiling, customs data showed.

Advertisement

US Government Reports Another Bullish Draw

The market is also being underpinned by another reported drawdown in U.S. crude oil stockpiles, though gasoline and distillate inventories rose as refiners ramped up output to the highest level since August, the Energy information Administration said on Wednesday.

Crude inventories fell by 3.2 million barrels in the week to January 8 to 482.2 million barrels, compared with expectations in a Reuters poll for a 2.3 million-barrel drop. U.S. gasoline stocks rose by 4.4 million barrels in the week to 245.5 million barrels, compared with expectations for a 2.7 million-barrel rise. Distillate stockpiles rose by 4.8 million barrels in the week, versus expectations for a 2.7 million-barrel rise.

Refinery crude runs rose by 274,000 barrels per day in the last week, the EIA said. Refinery utilization rates rose by 1.3 percentage points, in the week, boosting overall refining use to 82% of capacity, highest since August.

Bearish Signs Emerging

Reuters reported that Brent’s six-month backwardation, whereby contracts for later delivery are cheaper, fell to its lowest level in since January 5, indicating bullish sentiment is easing.

Meanwhile, China, the world’s second-largest oil consumer, reported its biggest daily jump in new COVID-19 cases in more than 10 months as infections in a northeastern province nearly tripled.

Short-Term Outlook

One piece of good news is that refiners are starting to ramp up production of products, however, fuel demand remains low, with the four-week average of gasoline product supplied down 11% from the year-earlier period. Consumers continue to use less fuel as they restrict their movements due to coronavirus.

Additionally, oil producers face an unprecedented challenge balancing supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, said an official at the International Energy Agency (IEA).

The markets are probably overdue for a correction, which could be what the technical chart pattern is indicating. A decent 2 to 3 day break would alleviate some of the upside pressure.

For a look at all of today’s economic events, check out our economic calendar.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
IMPORTANT DISCLAIMERS
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.
RISK DISCLAIMER
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.
FOLLOW US