Futures on US West Texas Intermediate Crude Oil eased from yesterday’s over 1-year high on Thursday due to expectations of slower economic recovery, while speculation emerged that recent oil price gains could prompt key producers to cut output at a lesser rate.
“Benchmark crude oil futures fell … as investors tapped the brakes on the run in crude prices after taking in tepid U.S. inflation data and comments from the Federal Reserve chief affirming the outlook for a slow recovery,” Avtar Sandu, senior commodities manager at Phillip Futures, wrote in an investor note.
Oil prices have recently been supported by output cuts agreed on by OPEC+ members as well as investor optimism that COVID-19 vaccine roll-outs could trigger a rebound in demand for the black liquid.
Meanwhile, the US Energy Information Administration (EIA) reported on Wednesday that crude oil inventories had dropped by 6.644 million barrels during the week ended February 5th to 469 million barrels, or their lowest level since March 2020. In comparison, analysts on average had expected a 0.985 million barrel increase in inventories last week.
Yet, there are opinions among experts that the market has moved too far ahead, which could prompt oil producers such as Saudi Arabia to trim output cuts.
“Despite finding support for the large draw in the U.S. crude stockpiles … oil prices couldn’t hold onto gains possibly on the expectation that Saudi Arabia could roll back their unilateral Feb/Mar production cuts and that OPEC could signal more production coming back online at the March meeting given the sizzling recovery in oil prices,” Stephen Innes, chief global markets strategist at Axi, was quoted as saying by Reuters.
As of 9:50 GMT on Thursday WTI Crude Oil Futures were edging down 0.43% to trade at $58.43 per barrel, while moving within a daily range of $58.17-$58.47 per barrel. Yesterday the commodity climbed as high as $58.91, or its strongest price level since January 21st 2020 ($59.77 per barrel). WTI Crude Oil Futures have risen 11.84% so far in February, following another 7.58% surge in January.
Brent Oil Futures were inching up 0.05% on the day to trade at $61.17 per barrel, while moving within a daily range of $60.97-$61.22 per barrel. Yesterday the commodity climbed as high as $61.68, or its strongest price level since January 24th 2020 ($62.44 per barrel). Brent Oil Futures have risen 11.20% so far in February, following another 6.38% surge in January.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $58.56
R1 – $59.03
R2 – $59.39
R3 – $59.86
R4 – $60.34
S1 – $58.20
S2 – $57.73
S3 – $57.37
S4 – $57.02
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $61.24
R1 – $61.58
R2 – $62.02
R3 – $62.36
R4 – $62.70
S1 – $60.80
S2 – $60.46
S3 – $60.02
S4 – $59.58