Oil Price Fundamental Daily Forecast – Tightening Supplies, Strong Demand Providing Support

We’re looking at a developing battle between long-term bulls, who are betting on support from supply disruptions, and short-term bears, who expect prices to be capped or even weaken due to increasing U.S. production.
James Hyerczyk
Crude Oil
Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are inching higher early Thursday. U.S. crude is hovering near the $72.00 level. Brent is within striking distance of the psychological $80.00 level, a price not traded since November 2014. Tightening supplies and strong demand is providing the support.

At 0745 GMT, July WTI crude oil is trading $71.84, up $0.28 or +0.39% and July Brent crude oil is at $79.53, up $0.25 or +0.32%.

Daily July West Texas Intermediate Crude Oil

Additional support is being provided by geopolitical risks and an unexpected fall in inventories.

On Wednesday, the U.S. Energy Information Administration reported that U.S. crude inventories dropped by 1.4 million barrels in the week to May 11, to 432.34 million barrels.

Not all the news was bullish on Wednesday, the International Energy Agency (IEA) said on Wednesday that it had lowered its global oil demand growth forecast for 2018 from 1.5 million barrels per day (bpd) to 1.4 million bpd.

The IEA also said global demand would average 99.2 million bpd in 2018. Additionally, the IEA said although supplies currently only stand at 98 million bpd due to supply cuts led by OPEC, the IEA said that “strong non-OPEC growth…will grow by 1.87 million bpd in 2018.”

Daily July Brent Crude


The spread between internationally-favored Brent crude oil and U.S. WTI crude oil continues to widen. This makes sense since the U.S. sanctions against Iraq are likely to lead to some supply disruption although we may not see the full impact of the supply reductions until November. This news is supportive from Brent crude.

They say all ships will rise with the tide and this may be the case with crude oil, but don’t expect WTI crude oil to rise as fast as Brent crude oil. This is because of surging U.S. production, which now sits at a record 10.72 million bpd.

Traders are also saying that United States production is ready to overtake Russia production. Additionally, as a result of surging production, U.S. crude is increasingly appearing on global markets as exports.

There is a bullish tone developing in the market today, but this is probably because investors are supporting the markets on dips. Investors seem to be reluctant about buying strength or taking out offers. This is a sign that there are sellers in the market.

We’re looking at a developing battle between long-term bulls, who are betting on support from supply disruptions, and short-term bears, who expect prices to be capped or even weaken due to increasing U.S. production.

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

Top Promotions

Top Brokers

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.