Oil Price Fundamental Daily Forecast – Prices Surge on Bullish API Report, Next Up EIA Numbers

U.S. West Texas Intermediate and international-benchmark Brent crude oil closed higher on Tuesday on renewed optimism of an extension to OPEC output cuts at next week’s key producers meeting on November 30. However, gains were limited by worries over increasing U.S. production.

The markets also remained supported by geopolitical tensions in the Middle East and a deteriorating macroeconomic picture in Venezuela.

January WTI crude oil settled at $56.83, up $0.41 or +0.73% and February Brent crude oil finished the session at $62.32, up $0.26 or +0.42%.

Forecast

Crude oil futures are trading higher early Wednesday after the American Petroleum Institute (API) reported a draw of 6.356 million barrels of United States oil inventories. Traders had price in a 2.1 million barrel draw. The news erased last week’s unexpected 6-million-barrel build.

Gasoline inventories, according to the API, also saw a build this week, of 869,000 barrels for the week-ending November 17. This was only slightly below the expected build of 1 million barrels.

Distillate inventories saw a decline this week, down 1.67 million barrels.

Later today at 1530 GMT, the U.S. Energy Information Administration is scheduled to release its weekly inventories report. It is expected to show a draw of -1.4 million barrels. Given the API number, the EIA report could show a bigger-than-expected draw.

Barring any surprises in the EIA data, crude oil futures are likely to finish the session higher based on the early trade and expectations of light holiday volume.