Plus $2.33 or 4.1%
The price of WTI crude oil futures are settling at $58.43. That is a gain of $2.33 or 4.1%. The move higher today was helped by a bigger than expected drawdown of inventories of -4856K versus -1500K estimate. News that Saudi Arabia is is threatening to keep production higher to punish producers who don’t keep to their quotas had little impact.
Looking at the 60 minute chart above, the contract spiked above its 100 hour and 200 hour moving averages (blue and green lines) and extended up to the recent highs over the last 9 or so trading days between $58.67 and $58.74. The high price today reached $58.66. The low for the day was down at $56.28.
A move above this ceiling would be more bullish for the contract. Staying below, and we could see a rotation back down toward the 200 hour moving average of $57.46.
WTI crude at the best levels since Friday
There was a huge build in US oil supplies in data released today but the market has shaken it off. That’s a great sign for the bulls and it comes — in part — due to draws in products.
I think this could lead to some short-term upside but WTI needs to get above $56 to really make any headway.
Oil drops $1 fast
WTI crude oil fell to $57.30 from $58.50 in a quick move after Trump announced he was firing national security advisor John Bolton. It’s since bounced back 40 cents.
Bolton has long favored military solutions everywhere, but particularly in the Middle East. The news diminishes the chances of bombs falling on Iran.
Minutes after that news, the EIA lowered its forecasts for world oil demand this year and next. They saw a rise of an 890,000 barrel per day rise compared to 1 million barrels previously for this year. For 2020, they trimmed the forecast by 30,000 bpd to a rise of 1.4mbpd.
Offsetting that somewhat is a lower forecast for US production next year at 13.23 mbpd compared to 13.26 mbpd.
Fresh lows for WTI
It’s turned into a brutal day for oil. WTI is now down nearly 5% as another wave of selling hits into the settlement.
It’s legged lower in another quick move to $56.30 from $57.15. It had been propped up by some laughably bad geopolitical rumors but it’s rolled over again into the floor.
The settlement is $56.25, down just shy of $3 per barrel.
As traders we often fret about the markets humbling us, but the same market just humbled OPEC, who ostensibly has more control over it than anyone.