Brent crude was trading higher than 1% breaching above the $40 price level while the West Texas Intermediate gained as high $39/barrel. Both crude oil contracts rallied by more than 2% yesterday
The bulls are riding on the report released by the American Petroleum Institute showing U.S. crude oil stockpiles plunged by 9.5 million barrels last week, experts had earlier anticipated that they expected crude oil inventories to increase by about 1.3 million barrels.
These impressive macros gave the crude oil bulls the needed gas to break the respective resistance level, and in the case for Brent crude seems ready to surge above $41.50/barrel.
In addition, oil and gas supplies around the U.S major energy hubs seem to be tightening as more than a quarter of U.S. offshore energy output were closed, including its oil ports yesterday as Hurricane storm Sally moved toward the Gulf of Mexico.
The world’s second-largest consumer of gasoline, in its latest economic data, revealed China’s Industrial Production and Retail sales recorded impressive numbers, thereby giving the bulls enough ammunition to support the price of Brent crude above $40/barrel in the near term.
All these fundamentals stated above are supportive of the black liquid hydrocarbon and boosting the volatility in an already depressed oil market.
It’s fair to say that as the economic engines of emerged markets most especially the U.S and China have started to fire on all cylinders, coupled with the recent advancement of the COVID-19 vaccine, meaning crude oil bears might have to wait on the warm bench much longer.
This article was originally posted on FX Empire
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