- EIA shows U.S. crude stocks rose 3.6 million barrels last week.
- Nigeria stays indecisive over additional output cuts.
- FOMC Chairman Powell’s comments help WTI recover a small portion of its losses.
Following a 2-day long recovery, crude oil prices came under pressure on Wednesday and the barrel of West Texas Intermediate slumped to its lowest level in more than a year at $50.05 before settling 2.5% lower at $50.30.
Earlier in the day, Ibe Kachikwu, Nigeria’s oil minister, following his meeting with Saudi Energy Minister, Khalid al-Falih, said that it was too early whether Nigeria would joint an additional oil output cut and weighed on crude oil prices. Al-Falih, on the other hand, told reporters that Saudi Arabia would not cut production on its own to stabilise the oil market.
Additionally, the weekly report published by the EIA on Wednesday revealed that crude oil stocks in the U.S. increased by 3.6 million barrels for the week ending November 23 compared to analysts’ estimate for an increase of 0.7 million barrels. Other details of the report also showed that the crude oil production in the U.S. stayed unchanged in that period at 11.7 million barrels per day.
Although the greenback came under a heavy selling pressure following FOMC Chairman Powell’s hawkish remarks in New York and helped the USD denominated WTI recover moderately, the sentiment surrounding crude oil ahead of the OPEC meeting didn’t allow a deep correction.
Technical levels to consider
The initial support aligns at $50 (psychological level/daily low) ahead of $49.10 (Oct. 9, 2017, low) and $48.50 (Sep. 6, 2017, low). On the upside, resistances are located at $52.50 (daily high), $54.10 (Nov. 23 high) and $55 (psychological level).
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