API reports deficit while the market awaits EIA report

The North American oil benchmark, WTI continues to struggle to gain grounds as supply still remains quite elevated and the meeting in Algeria between OPEC members as well as Russia, ended without a production freeze deal.

Key factors at play in Crude market –

• The latest talks in Algeria failed to produce a deal as Iran said that it not only wants to reach the pre-sanction levels in terms of production but will like to reach 13 percent share in OPEC production before it can agree to any deal.
• Latest reports from the OPEC and the IEA warns on the increased supply with is likely to outstrip demand at least until mid of next year.
• Russia and Saudi Arabia has formed a joint working group to find ways to reduce oil market volatility.
• Global oil inventory now stands at 3.1 billion barrels.
• Saudi Arabia and Russia have formed a joint working group to study ways to reduce oil market volatility.
• Active oil rigs in the US have been climbing and up more than 25 percent from its bottom.
• API report showed 0.75 million barrel draw in weekly crude oil stock. In addition to that, distillate inventory declined by 0.34 million barrels and gasoline inventory declined by 3.7 million barrels.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 14:30 GMT. Trade idea –

• WTI is currently trading at $45.1 per barrel, might try to gain grounds from here to test the $50 area but a break below $43 per barrel support area would open up the sub-40s for the oil.