Crude oil is trading sideways on Thursday. In the North American session, West Texas Intermediate crude oil futures are trading at $57.85, down $0.22 or 0.38%. Brent crude oil futures are trading at $63.80, down $0.37 or 0.61%.
Crude Inventories Show Surplus
The markets are becoming accustomed to crude inventory surpluses, as crude stockpiles continue to build up. The Energy Information Administration (EIA), which indicated a surplus for a fifth straight week, has reported only one decline in the past 11 weeks. The most recent reading came in at 1.6 million, surprising analysts who had expected a draw-down of 0.5 million. The string of surpluses continues to put downward pressure on oil prices.
Will Positive GDP Raise Demand for Crude?
The United States is the world’s number one consumer of oil, so stronger domestic economic activity can be expected to raise the demand for crude. There was good news from GDP in Q3, as the second estimate came in at 2.1%, up from 1.9% in the initial release. Investors will be monitoring data for Q4 – stronger numbers could mean that oil prices will rise. As well, if the U.S. and China can wrap up trade talks and reach an interim trade agreement, this would likely boost global demand for oil and result in higher oil prices.
With crude in a consolidation pattern, our technical analysis remains in place. The line of 58.15 is under pressure in resistance. Above, there is resistance at 59.30. This line, which has not seen action since mid-September, is protecting the symbolic 60.00 level.
On the downside, we find support at 57.50. Note that the 200-EMA and 50-EMA lines remain relevant and are additional barriers against downward movement. The 200-EMA is currently at 57.02 and is closely followed by the 50-EMA at 56.33.
This article was originally posted on FX Empire
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