API reports withdrawal while market awaits EIA report

Both Brent and WTI is down over the past two weeks or so, despite OPEC and N-OPEC members extending the supply reduction agreement.

Key factors at play in crude oil market –

• President Trump recognized Jerusalem as Israel capital last week sparking tensions in the region.
• A crack in North Sea pipeline leading to shut off in oil supply is exerting upward pressure on Brent.
• OPEC members and participating non-OPEC countries have agreed to extend the supply reduction agreement until the end of 2018.
• Saudi Crown Prince Mohammad bin-Salman led Corruption Committee arrested scores princes, scores of senior officials and incumbent ministers. One prince died in a shootout while resisting arrest.  The corruption Committee has seized billions of dollars’ worth of assets.
• Based on Reuters’ survey OPEC compliance has nit 112 percent in November. Official figures are not out yet.
• OPEC report showed production declined by 151,000 barrels in October.
• OPEC production increased by 88,000 barrels/day in September after declining by 79,000 barrels per day m/min August, and that after an increase of 173,000 barrels per day in July. In June production rose by 393,000 barrels per day in June compared to the previous month. In May production increased by 366,000 barrels per day.
• Current U.S production at 9.71 million barrels per day.
• The oil market is in backwardation, both Brent, and WTI.
• API reported a large draw of 7.382 million barrels of crude oil. Gasoline saw a build of 2.334 million barrels.

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

Trade idea –

• Active call - WTI reached the target of $56 per barrel and Brent reached $65 per barrel. Next target for Brent at $68 per barrel. WTI is likely to make a top around $60.5 per barrel area.

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