Oil Price Fundamental Daily Forecast – WTI Getting Support from Keystone Event, Low Volume Limiting Gains

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading slightly better early Friday ahead of what is expected to be an extremely low volume trading session.

At 0804 GMT, January WTI crude oil is trading $58.61, up $0.05 or +0.09% and February Brent crude oil is at $63.34, up $0.09 or +0.14%.

U.S. crude oil hit a two-year high early Friday, driven higher by the shutdown of a major crude pipeline from Canada to the United States, which is expected to tighten North American markets.

WTI crude is being supported by the closure of the 590,000-barrel-per-day (bpd) Keystone pipeline following a spill last week. The event has driven up U.S. crude as stockpiles at the storage hub of Cushing, Oklahoma, have declined.

Globally, investors are preparing for a major OPEC meeting on November 30. At the meeting, the cartel and other major producers are expected to extend the current deal to cut output beyond the original March 30 deadline. The new deal is expected to call for a 9-month extension into the end of the year.

The oil market fundamentals may be improving, however, some traders still feel that gains are being limited by rising U.S. production. Recently, it was reported that U.S. oil production jumped by 15 percent since mid-2016 to a record 9.66 million bpd, thanks largely to aggressive shale drilling.

On Friday, were looking for a steady trade due to expectations of extremely low volume. WTI crude is expected to be the strongest market because the Keystone pipeline event is affecting U.S. crude supplies. Brent futures may find some support, but it’s not the focus at this time.