WTI is gaining back ground from its post-referendum slump as market participants bet that fallouts from UK referendum won’t be large.
Key factors at play in Crude market –
- A looming strike in oil sector of Norway is providing some support.
- Goldman Sachs has called that crude recovery is over and price may once again drop lower.
- However, both OPEC and IEA have said that oil market is moving to a balance in second half of this year.
- Canada’s production is under recovery after wild fire shut down 1.8 million barrels/day.
- Nigeria and Venezuela still facing troubles with production and outages. Militants in Nigerian delta has declined to ceasefire.
- U.S. oil production has dropped to 8.74 million barrels/day and likely to drop further.
- Major supply increase is taking place from Middle East. Iran’s output rose 80,000 barrels/day in May to 3.84 million barrels/day. Saudi Arabia is expected to increase production to 11 million barrels/day.
- India has emerged as biggest incremental crude buyer this year.
- American Petroleum Institute’s (API) weekly report showed inventory declined by 3.9 million barrels.
Today’s inventory report from US Energy Information Administration (EIA), to be released at 14:30 GMT.
Trade idea –
- WTI is trading at critical juncture where bears are fighting to push prices towards $40 per barrel and bulls are eyeing $60 per barrel. Key level is $52/barrel. WTI si cuurently trading at $48.2 per barrel and Brent at $0.5 per barrel premium.
The material has been provided by InstaForex Company – www.instaforex.com