API Reports Surplus, While WTI Awaits EIA Report's Calls Updated
WTI is trading at key resistance area at $41.8/barrel.
Key factors at play in Crude market –
- Doha talks failed to secure a freeze deal over the weekend, largely due to Saudi opposition, who demanded for Iran to join the deal too, which Iran rejected. Due to recent rise in oil price, urgency was lesser than that of February’s.
- Saudi crown Prince, Mohammad bin-Salman has emerged as key power in Saudi Arabia.
- After the failure of deal, oil found support in Kuwait’s strike, which reduced production by as much as 40%. However that issue got solved today.
- Barclays and Goldman Sachs have warned that recent commodities rally isn’t riding on fundamental improvements and it could easily deteriorate if investors rush for exit.
- IEA in its latest report cited freeze initiative and weaker Dollar behind oil rally suggested that price may have bottomed.
- American Petroleum Institute’s (API) weekly report showed inventory buildup of 3.1 million barrels.
Today’s inventory report from US Energy Information Administration (EIA), to be released at 14:30 GMT.
Trade idea –
- WTI is currently consolidating at key resistance area, however price actions suggest some juice may still be left. However breaking $43-45 area may not happen in this run and WTI could once again retrace back to $32/barrel area.
- If WTI succeed in breaking the resistance then it would target $60/barrel area.