Crude oil marches confident this week adding $2.15 pb, and clocked three years high at $63.56 on Wednesday pushed by disappointing EIA report showing a sharp decline in U.S Inventories and successful OPEC efforts keeping WTI at high levels.
EIA report showed a severe drop in U.S Inventories on Jan 5th 2018 by 11.2M barrels reaching 416.6M barrels while expectations were at 3.9M barrels. For now, EIA recorded a drop for the eight consecutive weeks.
On the other hand, The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia are maintaining supply limits in place in 2018, a second year of restraint, to minimize a price-denting glut of oil held in inventories. (Reuters).
Markets are awaiting U.S Inventories data release today at 3:30 PM GMT, in case of confirmation, the draw will be the largest since Sept. 2, 2016. U.S. stockpiles fell by 14.5 million barrels during that week.
“We expect oil demand growth to outpace non-OPEC supply growth in both 2018 and 2019,” Standard Chartered analysts said in a note. (Reuters)
“In our view, the back of the Brent and WTI curves are both still underpriced. We do not think that prices below $65 per barrel are sustainable into the medium term.”
The increase in prices is expected to rise gains in U.S. production during 2018, offsetting curbs by others.
Crude oil technical overview ahead of U.S Inventories: