Oil Price Fundamental Daily Forecast – Speculative Buyers Gaining Confidence as Supply Tightens

All the concerns over future demand seem to have disappeared with the stronger-than-expected manufacturing numbers from China and the United States. This means speculators can go back to focusing on the supply side of the equation. Conditions are getting tighter which means speculators can play the long side more aggressively and with more confidence.
James Hyerczyk
Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil inched up to a new high for the year early in the session on Tuesday before pulling back slightly. The early strength is being supported by reports that the Trump administration is considering more sanctions on Iran and that an important Venezuelan export terminal has halted operations.

Additional support is being provided by a Reuters survey that showed OPEC oil supply sank to a four-year low in March, and positive manufacturing reports from China and the United States.

At 08:01 GMT, May WTI crude oil is trading $61.67, up $0.08 or +0.13%. This is down from an earlier high at $62.02. June Brent crude oil is at $69.05, up $0.04 or +0.06%. It hit a high of $69.50 earlier in the session.

According to a senior Trump administration official, the U.S. government is considering additional sanctions against Iran that would target areas of its economy that have not been hit before. The official also suggested that the U.S. may not extend waivers from sanctions on Iranian oil exports to a group of eight importers that expire next month.

Additionally, Venezuela’s Jose crude export terminal has halted operations due to the lack of electricity supply, two sources with knowledge of the situation said.

Daily Forecast

Everything seems to be coming up roses for bullish crude oil traders and we don’t even have a U.S.-China trade deal in place yet.

All the concerns over future demand seem to have disappeared with the stronger-than-expected manufacturing numbers from China and the United States. This means speculators can go back to focusing on the supply side of the equation. Conditions are getting tighter which means speculators can play the long side more aggressively and with more confidence.

Later today, prices could get a boost from the American Petroleum Institute’s weekly storage report that could signal another drop in supply. Early estimates are calling for a 700,000 barrel decline in inventory.

Furthermore, a recent report showed a drop in U.S. production, and U.S. oil producers are cutting the number of producing rigs.

For WTI traders, the next objective is $63.45 with support coming in at $59.63. Brent traders have a target at $71.77 with $67.90 support.

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
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