API reports build while market awaits EIA report

Both Brent and WTI is heading lower as U.S. shale production continues to beat the estimate. WTI is currently trading at $58.6 per barrel and Brent at $3.7 per barrel premium to WTI.

Key factors at play in crude oil market –

• OPEC and Russia to cooperate on oil production beyond 2018.
• Venezuela in crisis as oil production declined to 1.6 million barrels per day.
• EIA projects U.S. crude production to increase to 11. 4million barrels per day by end of 2019.
• OPEC members and participating non-OPEC countries have agreed to extend the supply reduction agreement until the end of 2018.
• Saudi corruption crackdown yielded $106 billion according to the country’s attorney general.
• OPEC production was 32.46 million barrels per day in January.
• Current U.S production at 10.25 million barrels per day.
• The oil market is in backwardation, both Brent, and WTI.
• API reported a surprise build of 3.947 million barrels of crude oil. Gasoline saw the draw of 0.23 million barrels.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 15:30 GMT.

Trade idea –

• Active call - Brent short-term target reached at $62 per barrel.

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