U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading lower on Thursday, but inside the previous day’s range. The chart pattern suggests investor indecision and impending volatility. Pressuring prices are renewed concerns over rising U.S. crude inventories and record production levels. Helping to underpin prices are the OPEC-led supply cuts and Washington’s sanctions against Venezuelan crude exports.
U.S. Energy Information Administration Weekly Inventories Report
According to the Energy Information Administration (EIA), U.S. crude oil inventories climbed by 1.3 million barrels in the week-ended February 1 to 447.21 million barrels. This figure matched expectations.
Average weekly crude oil production remained at the record 11.9 million barrels per day (bpd) it reached in late 2018.
Traders are still worried about the global economic slowdown especially because of the uncertainty surrounding the U.S.-China trade deal. An economic slowdown in the Euro Zone is now a concerns after German industrial output unexpectedly fell in December for the fourth consecutive month.
OPEC and Venezuela
The key story supporting the market and driving the price action is the OPEC-led production cuts. Short-term, the market is getting a boost from U.S. sanctions on Venezuelan oil exports.
Potentially Bullish News
Traders are watching how long a partial closure of the Keystone oil pipeline would last after the discovery of a possible leak in the area of St. Louis Missouri.
The daily trend is up for both WTI and Brent crude oil, however, momentum is starting to shift to the downside. Prices are likely to remain rangebound, or drift sideways to lower until the U.S. and China reach a trade deal.
Please let us know what you think in the comments below.
This article was originally posted on FX Empire
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