Oil Price Fundamental Daily Forecast – Traders Expect API Report to Show Another Draw

U.S. West Texas Intermediate and international-benchmark Brent crude oil finished mixed on Monday. Early Tuesday, a similar trading pattern is holding the markets in a narrow range.

On Monday, February WTI crude oil settled at $57.22, down $0.11 or -0.19% and March Brent crude oil ended the session at $62.91, up $0.26 or +0.42%.

Oil prices are inching up on Tuesday with the markets, especially Brent, underpinned by the Forties pipeline outage in the North Sea and the OPEC-led production-cut program. Surging U.S. output is putting a lid on any major advances.

At 0920 GMT, February WTI crude oil is trading $57.52, up $0.30 or +0.52% and March Brent crude oil is at $63.10, up $0.19 or +0.30%.

Forecast

Thin pre-holiday trading conditions could produce another two-sided trading session on Tuesday. There isn’t expected to be any significant event today that could move the markets in a big way in either direction. Most of the price action is likely to be determined by the chart pattern and the order flow.

For the February WTI futures contract, the longer-term picture is being influenced by a major technical level at $57.07. Holding above this level will give the market an upside bias. The short-term level that needs to be overtaken to sustain a rally is $57.65.

March Brent futures are being controlled by a short-term pivot at $63.20.

Later today, traders will get the opportunity to react to the American Petroleum Institute’s weekly storage report. This report will give us an early look at U.S. production and inventories numbers for the week-ending December 15. It is often used as a proxy for Wednesday’s U.S. Energy Information Administration’s weekly inventories report.

Traders are looking for the API report to show a 3.518 million barrel drop in crude inventories, a 1.327 million barrel decline in distillates and a 2.231 million barrel build in gasoline.