Oil Price Fundamental Daily Forecast – Series of Bullish Events Shifts Momentum to UpsideWTI crude oil changed trend when buyers took out $54.99. If the upside momentum continues then were looking for a minimum test of $57.41 over the short-run. The trend will change to up for Brent crude oil when buyers take out the main top at $64.13. This should trigger an acceleration to the upside with the first target coming in at $65.93.
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading sharply higher on Thursday. U.S. crude oil accelerated to the upside after the trend changed to up on the daily chart. Brent crude oil is rapidly approaching a breakout area on the daily chart.
Several factors are contributing to the steep rise in crude oil prices. The buying started earlier in the week on the hopes that a meeting between U.S. President Trump and China President Xi Jinping will lead to an eventual trade deal between the two economic powerhouses. It continued early Wednesday following the release of a better-than-expected government inventories report.
A weaker U.S. Dollar is also helping to boost foreign demand for dollar-denominated crude oil. The greenback weakened when the Federal Reserve hinted at a July rate cut. Buyers are also reacting to reports that OPEC and its allies will extend the deal to cut production, trim the excess supply and stabilize prices.
The biggest story of the day is an escalation of tensions in the Middle East after a U.S. official said one of the country’s military drones was shot down by an Iranian missile. The drone was downed in international airspace over the Strait of Hormuz by an Iranian surface-to-air missile, a U.S. official said on Thursday, speaking on condition of anonymity.
U.S. Energy Information Administration Weekly Inventories Report
On Wednesday, the EIA reported that U.S. crude supplies fell by 3.1 million barrels for the week-ended June 14. This was the first decline in 3 weeks. Traders were expecting a 1.5 million barrel draw down.
The EIA report also showed that gasoline inventories were down 1.7 million barrels, while distillate stockpiles edged lower by 600,000 barrels last week. Traders were looking for supply increases of 1 million barrels each for gasoline and distillates.
Upside momentum is strong on the back of a series of bullish developments so we’re looking for higher prices to continue throughout the session.
WTI crude oil changed trend when buyers took out $54.99. If the upside momentum continues then were looking for a minimum test of $57.41 over the short-run. The trend will change to up for Brent crude oil when buyers take out the main top at $64.13. This should trigger an acceleration to the upside with the first target coming in at $65.93.