Oil Price Fundamental Daily Forecast – While EIA Reports Inventories, Traders Await Major OPEC+ Decision

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Wednesday and at their highs of the session ahead of today’s U.S. Energy Information Administration (EIA) weekly inventories report at 15:30 GMT. Helping to boost prices were increasing demand for risk assets and better than expected U.S. economic reports.

At 15:37 GMT, March WTI crude oil is at $51.53, up $1.82 or +3.89%.

Bullish traders are also hoping to hear that OPEC and its allies have agreed to trim another 500,000 barrels per day of crude oil.

American Petroleum Institute Weekly Inventories Report

Helping to keep a lid on prices is a report from the American Petroleum Institute (API). Late Tuesday, the API said crude oil inventory rose 4.18 million barrels during the week-ending January 31. Analysts were looking for a 2.8-million barrel build.

The API also reported a build of 1.96 million barrels of gasoline. Analysts were predicting a 960,000 barrel build.

Distillate inventories were down by 1.78 million barrels, compared to last week’s 141,000 draw, while Cushing inventories rose by 960,000 barrels.

Demand Concerns

The economic slowdown resulting from the coronavirus outbreak is expected to reduce 2020 global demand growth by 300,000 to 500,000 barrels per day, roughly 0.5% of global demand, BP’s Chief Financial Officer Brian Gilvary said on Tuesday.

Other News

OPEC and its allies are considering further output cuts and moving a planned policy meeting to February rather than March.

Strong US Economy Could Boost Demand

A bullish U.S. jobs report is also underpinning the market on Wednesday. According to a report from ADP and Moody’s Analytics, the private sector of the economy added 291,000 in private payrolls for the best monthly gain since May 2015. Traders were looking for an increase of 150,000 jobs.

In another potential blow to the gold market bulls, U.S. services sector activity picked up in January, with industries reporting increases in new orders, suggesting the economy could continue to grow moderately this year even as consumer spending is slowing.

The Institute for Supply Management (ISM) said on Wednesday its non-manufacturing activity index increased to a reading of 55.5 last month, the highest level since August.

Finally, the EIA reported a 3.4 million barrel build for the week. This was bigger than analyst estimates and could help keep a lid on prices.