- WTI revisits November-start area after increase in private inventory reports.
- The energy benchmark previously declined on concerns that Russia will stay away from further supply cuts.
- Today’s official stockpile numbers in the spotlight for now.
Adding to the hardships for energy buyers, a surprise build in API oil inventories dragged WTI to a 13-day low near $55.20 by the press time of early Asian session on Wednesday.
The weekly Crude Oil Stock report from the American Petroleum Institute (API) survey showed that oil inventories rose 5.954 million barrels during the week ended on November 15 versus the earlier depletion of 0.5 million barrels.
That adds pressure on the supply side which was already bearing the burden of Reuters news that Russia was unlikely to agree to deepen additional oil output cuts at the Organization of the Petroleum Exporting Countries’ (OPEC) meeting in Vienna on December 5th.
Also increasing the downside pressure could be the uncertainty surrounding the trade deal between the United States (US) and China. The world’s top two economies are at loggerheads over the tariff rollback for phase one deal while Hong Kong protests and tussle over Taiwan continues.
Energy traders will now focus on the official reading of oil inventories to confirm the latest supply concerns. The Energy Information Administration (EIA) Crude Oil Stocks change for the week ended on November 15 is expected to register 1.062 million barrels of oil inventories versus 2.219 million barrels prior. It should also be noted that headlines concerning geopolitical tension in Iran and US-China trade news will add burden on market watchers.
Given the black gold’s break below the six-week-old rising trend line, prices are likely to retest October-end low near $53.70 while further downside can recall $52.50 and the previous month’s bottom surrounding $51.20 on the chart. In the case of pullback, the quote needs to cross $56.50 to challenge the recent highs near $58.20.