Futures on US West Texas Intermediate Crude Oil rose to a one-week high on Wednesday, following a report of a larger-than-anticipated drop in US crude stocks, which indicated demand was picking up regardless of the spread of the novel coronavirus.
Latest data from the American Petroleum Institute (API) showed crude oil inventories in the United States had decreased by 8.2 million barrels to 537 million barrels during the week ended June 26th. It has been the most significant decrease in inventories since the week ended August 23rd 2019.
The official government report on crude oil stocks by the US Energy Information Administration (EIA) is scheduled to be released at 14:30 GMT today. Market expectations point to a decrease in stocks by 0.71 million barrels during the past week.
Another oil market-supporting factor was a reduction in output last month by the Organization of the Petroleum Exporting Countries (OPEC) to the lowest level in at least 20 years. 22.62 million barrels per day were produced on average in June, or 1.92 million barrels fewer compared to May.
“The fall in output means that OPEC over-complied with the deal in June, with compliance coming in at 107%,” ING Economics noted. However, this came as a result of extra cuts by Saudi Arabia, Kuwait and the United Arab Emirates.
“It is likely that compliance will slip again in July, unless we see a significant improvement in compliance from Iraq and Nigeria,” ING added.
As of 9:27 GMT on Wednesday WTI Crude Oil Futures were gaining 1.81% to trade at $40.55 per barrel, after earlier climbing as high as $40.56, or a price level not seen since June 23rd ($41.61). WTI Crude futures have risen 6.17% so far this week, following a 3.18% loss in the preceding week.
Brent Oil Futures were gaining 2.36% on the day to trade at $42.58 per barrel, after earlier advancing to $42.60, or a price level not seen since June 24th ($42.86). Brent futures have risen 4.67% so far this week, following a 2.91% slump in the prior week.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $39.59
R1 – $40.30
R2 – $40.77
R3 – $41.48
R4 – $42.19
S1 – $39.12
S2 – $38.41
S3 – $37.94
S4 – $37.47
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $41.53
R1 – $42.03
R2 – $42.47
R3 – $42.97
R4 – $43.48
S1 – $41.09
S2 – $40.59
S3 – $40.15
S4 – $39.72