FXStreet (Mumbai) – Both crude benchmarks are seen trading on divergent paths, with the US oil resuming the decline on the back of profit-taking, while the Brent extends the rebound on talks over output cuts.
WTI awaits EIA report and the Fed
Currently, WTI drops -2.32% to 30.72, while the Brent oil rises 1.30% to 32.16. The crude futures on Nymex snapped the previous rebound and fell back in the red after the API inventory report showed a larger than expected jump in the US crude reserves and therefore, accentuated the oversupply worries. The API data showed crude supplies climbed by 11.4 million barrels for the week ended Jan. 22, compared with expectations for an increase of 3.3 million barrels.
While the Brent finds support from the ongoing production cut talks from Russia and Saudi, which led to more than 4% surge in the prices yesterday. The oil minister of Iraq noted that Saudi Arabia and top non-OPEC producer Russia were willing to discuss production cuts.
However, concerns over supply glut continue to haunt markets as focus now turns towards the EIA weekly stockpiles report due later today. While the Fed concludes its 2-day policy meeting later today, with markets eagerly awaiting the outcome for fresh cues on the USD, which will eventually impact the US oil.
(Market News Provided by FXstreet)