|Bid||20.45 x 9200|
|Ask||20.46 x 4600|
|Day's Range||20.44 - 20.59|
|52 Week Range||11.88 - 20.77|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.90%|
We could be looking at a mixed trade today in reaction to yesterday’s EIA report. Pressuring the market is the rise in gasoline inventories which rose due to an extraordinary high level of imports and that is weighing on crude oil prices. However, tempering the news a little is the record exports of crude oil and distillate fuel last week.
Crude oil markets did very little during the trading session on Wednesday, as we essentially sat sideways. The market is awaiting inventory numbers, and of course the fact that the US dollar may or may not have on pricing.
According to the EIA, Libya’s oil production decreased by 15,000 bpd (barrels per day) to 975,000 bpd in March 2018—compared to the previous month. However, production increased by 385,000 bpd or 65% from a year ago. Libya’s oil production has almost tripled in the last two years.
The divergence yesterday between WTI and Brent crude suggests the fundamental traders may be ahead of the market. This could also be a sign that a correction is coming.
Crude oil markets were very choppy during training on Tuesday, as we continue to grind overall. Ultimately, the market is testing the highs again, and that of course comes into play, but I think that we will continue to see a lot of headline risk when it comes to the crude oil markets.
The EIA estimates that US crude oil exports increased by 544,000 bpd (barrels per day) to 1,749,000 bpd on April 6–13. Crude oil exports also increased by 1,184,000 bpd or 210% from a year ago.
According to the EIA, the global crude oil supply outage increased by 18,000 bpd (barrels per day) to 1,793,000 bpd in March 2018—compared to the previous month. However, supply outages declined by 551,000 bpd or 24% year-over-year.
On April 23, Brent crude oil June futures settled at $6.07 more than WTI crude oil June futures. The difference is called the “Brent-WTI spread.” On April 16, the Brent-WTI spread was at $5.22.
According to the EIA, OECD’s (Organisation for Economic Cooperation and Development) crude oil inventories declined 0.7% to 2,783.5 MMbbls (million barrels) in March 2018—compared to the previous month. The oil inventories were near the lowest level since March 2015.
Bullish traders have hopped on the back of the Saudis who are said to be pushing for $70 to $80 per barrel crude oil in addition to driving inventory levels back to their normal range.
Crude oil markets initially went sideways, but as the Americans stepped on board, they started selling oil hand over fist. It looks as if we are going to continue to struggle, as the $70 level above has offered significant resistance of the last several sessions in the WTI grade, and of course we have corresponding action in the Brent market.
On April 20, 2018, major oil producers’ meeting was held in Jeddah to discuss extending ongoing production cuts. The meeting highlighted OPEC’s higher compliance with ongoing production cuts. On April 20, Saudi Arabia’s energy minister said that production cuts could continue into 2019. The expectation of an extension supported oil prices last week. Brent and US crude oil prices increased ~2% and ~1.5% respectively, last week.
Oil is coming back into the spotlight as recently, the commodity keeps making the new long-term highs. The uptrend on the WTI is remarkable from the technical point of view. The price is climbing up like on the staircase, making very nice trend continuation patterns.
On April 13–20, 2018, US crude oil June futures rose 1.6% and settled at $68.4 per barrel on April 20, 2018. During this period, US crude oil tracking ETFs and ETNs had the following returns: The United States 12 Month Oil ETF (USL) rose 1.9%. The PowerShares DB Oil ETF (DBO) rose 1.9%. The Credit Suisse X-Links WTI Crude Oil Index ETN (OIIL) rose 1.7%.
The crude is trading around its 4-yeah highs early this week. Brent is above $74, which means the long-term ascending channel is still here to stay and allows the bulls to make new records. Fundamentally, however, bears have more chance, while this is not very much significant in the lights of speculative expectations.
After testing its highest level since late 2014 last week, crude oil futures could be ripe for a short-term setback if investors decide to focus on the rising rig count and the possibility of further increases in U.S. crude production.
The fundamentals are mostly bullish at this time. Ongoing OPEC-led supply cuts are proving the longer-term support. One factor that could limit gains is rising U.S. production, which has jumped by a quarter since mid-2016 to 10.54 million barrels per day.
Overbought conditions could put pressure on the market today, but the closing price is likely to be determined by the rig count. Rising crude prices could encourage U.S. producers to open additional wells as they try to take advantage of the current situation in order to boost their bottom line.
Crude oil markets went back and forth during the day on Thursday, gaining slightly, but showing that there is a lot of indecision. We have recently rallied significantly though, so we might be simply catching our collective breath before making the next move.
It has a long way to go, but oil could return to $100 per barrel if Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries (OPEC), has its way. “Top oil exporter Saudi Arabia would be happy to see crude rise to $80 or even $100 a barrel, three industry sources said, a sign Riyadh will seek no changes to an OPEC supply-cutting deal even though the agreement’s original target is within sight,” reports Reuters. The United States Oil Fund (USO) , which tracks West Texas Intermediate crude oil futures, and the United States Brent Oil Fund (BNO) , which tracks Brent crude oil futures, shot higher on that report.
Prices are currently pressing late 2014-highs, supported by a decline in U.S. crude inventories and a drive by Saudi Arabia to push prices into the $80 to $100 per barrel area by continuing to withhold supplies.
We’re looking at the possibility of a two-sided trade because the EIA report calls for a build in crude stocks while the API report showed a drawdown. WTI and Brent crude oil could extend their gains if the EIA report shows a decline in crude inventories rather than an increase.
Crude oil markets drifted a bit lower during the Tuesday session, in what was relatively quiet trading. I believe that the market has plenty of support underneath though, but we could drift even further before we see the buyers return.
According to the EIA, US crude oil exports decreased by 970,000 bpd (barrels per day) or 45% to 1,205,000 bpd on March 30–April 6, 2018. However, US crude oil exports increased by 516,000 bpd or 75% year-over-year.