Crude oil is hovering near the $41.50 level and is looking for a catalyst to test the August highs once again. A weak U.S. dollar is helping the cause but W.T.I. will look to inventories later today for a boost.
The inventory situation is unknown with the American Petroleum Institute (API) releasing their own data for crude oil stocks on Tuesday, showing an increase of 4.17 million barrels for the week ending November 13th. The market had been expecting a build of 1.95 million barrels. Last week’s API number showed a big drop of 5 million barrels after expectations for only 900k. Today’s EIA crude inventories will either confirm the build, or show a rally-inducing draw in crude stocks.
An OPEC report has downgraded the outlook for oil again after the latest lockdown restrictions. The group said:
“For 2021, oil demand is expected to grow by 6.2 million barrels per day, year on year, representing a downward revision of 0.3 million barrels per day compared to last month’s assessment”.
OPEC had been set to raise the group output by 2 million barrels per day (bpd) in January, which is equivalent to 2% of global demand. With the latest lockdowns in Europe, the group are looking at extending the supply cut into 2021.
Crude oil moved higher on Friday and has paused around the $41.50 mark, which was previous resistance. The price of crude could now look to test the $43.00-43.50 resistance level and a breakout higher is possible. A close below $40.00 would weaken the bull trend. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
