- Oil bid on Venezuelan exports concerns and falling US crude stockpiles.
- Will it sustain the upside amid expectations of the OPEC output ramp up?
WTI (oil futures on NYMEX) stalled its gradual recovery mode just shy of the $ 96 barrier, although defends minor bids amid concerns over Venezuelan oil exports and bullish American Petroleum Institute (API) crude inventory report.
The barrel of WTI witnessed a solid recovery earlier today, mainly driven by an upsurge in its European counterpart, Brent, after the sources reported that Venezuela has raised the prospect of halting some crude oil exports. Recall that falling Venezuelan oil production combined with the prospects of the US sanctions on Iran had driven Brent to test the $ 80 mark last month.
More so, the API crude inventories report released late-Tuesday also helped keep the buoyant tone intact around the black gold. The API data showed that the US crude oil inventories fell by 2 million barrels, compared with analyst expectations for a decrease of 1.8 million barrels.
However, the gains in both crude benchmarks remain capped amid persisting concerns that the OPEC and non-OPEC producers could boost the output by 1 million barrel per day (bpd), especially in light of yesterday’s Bloomberg headlines that cited the US is said to have asked the Organization of the Petroleum Exporting Countries (OPEC) to raise the oil output by 1 million barrels per day (bpd).
Investors also remain cautious ahead of the official US government crude stockpiles data that will be published by the Energy Information Administration (EIA) due later today.
WTI Technical levels
Omkar Godbole, Analyst at FXStreet, noted: “The short-term outlook remains bearish despite and only a daily close above the 10-day MA, currently seen at $66.90 would add credence to yesterday’s bullish hammer and signal a short-term bullish-to-bearish trend change. Bearish scenario: Oil rises to 10-day MA, but fails to take out the moving average and drops below the 100-day MA of $65.34 In this case, oil could go as low as $62.00.”
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