Oil Price Fundamental Daily Forecast – Prices Rise as Traders Shrug Off Trade Worries, Higher Saudi Output

On Monday, U.S. data showed that crude inventories at the Cushing, Oklahoma delivery hub for WTI, fell about 1.2 million barrels in the week-ending November 8, traders said, citing market intelligence firm Genscape.
James Hyerczyk
Crude Oil

U.S West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Tuesday, rebounding from early session weakness caused by uncertainty over the progress of U.S.-China trade talks and new concerns about over supply. The turnaround in the market may have been fueled by optimism ahead of a speech by President Trump to the Economic Club of New York.

At 11:04 GMT, December WTI crude oil is trading $57.22, up $0.36 or +0.63% and January Brent crude oil is at $62.64, up $0.46 or +0.74%.

Trade Deal Worries Weigh on Demand

CNBC said worries about the impact on oil demand from the fallout of the 16-month U.S.-China trade war, which has weighed on global economic growth, have returned after doubts were cast on the chances of a so-called phase one agreement.

U.S. President Donald Trump said on Saturday that talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for Washington. He also said there had been incorrect reporting about U.S. willingness to rollback tariffs.

Last week, traders were concerned about when and where a trade deal would be signed after Chile canceled a world trade conference, and the U.S. and China couldn’t agree on a trade signing venue, pushing a potential deal into December. However, it’s been over a week since a signing date has even mentioned. This is leading some investors to believe the deal may not be signed until early 2020.

Renewed Supply Side Worries

Saudi Arabia raised its oil output in October to 10.3 million barrels per day (bpd), although it kept its supplies to oil markets below its OPEC output target.

In another potentially bearish development, OPEC and its allies will probably extend a deal to limit crude supply but are unlikely to deepen their cuts, Oman’s energy minister said.

Daily Forecast

Traders will be keeping an eye on any fresh trade deal developments since this could trigger a volatile reaction in the market.

There will be no American Petroleum Institute (API) supply report on Tuesday due to Monday’s U.S. Federal holiday. The report will be released on Wednesday with the U.S. Energy Information Administration (EIA) issuing its supply numbers on Thursday.

On Monday, U.S. data showed that crude inventories at the Cushing, Oklahoma delivery hub for WTI, fell about 1.2 million barrels in the week-ending November 8, traders said, citing market intelligence firm Genscape.

This is an important development because Cushing inventories had grown for five weeks in a row through November 1, according to government data.

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.