WTI Crude Oil Collapses on Saudi Oil Production – EIA Report Up Next
As per recent reports, the Permian basin (an oil field) of West Texas has drilled 114,000 in the previous decade. Many of them...
WTI crude oil clawed back to complete the 38.2% Fibonacci retracement at $54.50 after dropping to $52.74 on Tuesday. Recalling our earlier update, WTI Crude Oil Dips – Key Fundamentals Points to Know, the market fundamentals are causing massive selling in WTI crude oil.
- Bloomberg recently reported that the Permian basin (an oil field) of West Texas has drilled 114,000 oil wells in the previous decade. Many of them would turn a profit even with crude prices as low as $30 a barrel, which is putting OPEC nations under massive pressure. That’s why we are seeing another round of sell-off in crude oil.
- US crude oil output has risen by almost 25% this year, to a record 11.7 million barrels per day (bpd).
- The US-China trade war keeps the market uncertain as Trump is looking to hike the 10% tariff to 25% on $200 billion worth products. This has a very high probability of hurting the Chiese manufacturing sector. No manufacturing means less demand for crude oil. Since China is a top importer of crude oil, this sentiment threatens the crude oil bulls.
EIA Crude Oil Inventories
The stockpile report is due at 15:30 (GMT) today and economists are expecting a build of only 2.5 million barrels vs. 10.3 million barrels last week. The American Petroleum Institute (API) announced a surprise crude oil inventory draw this week, of 1.545 million barrels for the week ending November 16.
It’s the first week that witnessed a draw after six weeks of straight builds as reported by the API, which had weighed on oil prices. Let’s see how EIA report plays today.
Support Resistance
55.93 58.22
54.47 59.05
52.17 61.34
Key Trading Level: 56.76
Crude oil has completed 38.2% retracement on the 2 -hour chart at 54.50 but the uncertainty still looms which is why it’s better to wait for the EIA report before placing any trade in oil today.
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