US crude oil inventories rose by around 3.3 million barrels, a big surprise given expectations for a drop of the same large scale. In addition, gasoline and distillates are also up by millions of barrels against expectations.
WTI Crude oil dipped under $46, around $2 down after a few days of stability. The OPEC deal provided relatively stable trading and hopes for an upswing in prices, but after reaching resistance at $52, prices dropped.
The problem with OPEC’s production cuts has always been the US shale production. The output from America has risen from the bottom of 8.7 million to above 9.3 million barrels a day, and there’s still potential toward 9.6 mibpd which was the peak in early 2015.
The Canadian dollar is retreating as well, but the movements are limited. USD/CAD is getting closer to 1.35, but the Canadian dollar still enjoys the BOC’s optimism and also the upbeat GDP report.
Here is the daily chart of WTI. Further support awaits at $43.72, the cycle low. Resistance was at $47, and it is clearly broken.
More: Elliott Wave Analysis: USDCAD and Crude OIL
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