CRUDE BULLISH ON INVENTORIES FALL & HURRICANE
WTI Crude is currently trading at $70.88-higher by 1.46% from the last closing. The crude price rose on Wednesday after a drop in U.S. crude inventories and as the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production.
Brent crude futures were trading at $79.67-higher by about 0.36% at the time of writing. Brent touched a session peak of $79.72, the highest since late May on Wednesday.
The U.S. Energy Information Administration said in its weekly report on Wednesday that crude oil inventories fell by 5.296 million barrels in the week ended 7th September. Total U.S. crude oil inventories stood at 396.2 million barrels as of last week, according to a press release, which the EIA indicated was “about 3% below the five year average for this time of year”. Data published by the American Petroleum Institute on Tuesday showed a fall of 8.6 million barrels.
Meanwhile, Hurricane Florence threatens to disrupt fuel supplies as it moves toward North Carolina. It is expected to reach the continental U.S. by Friday.
Russian energy minister Alexander Novak on Wednesday warned of the impact of U.S. sanctions against Iran. The Energy Minister said that global oil markets were “fragile” due to geopolitical risks and supply disruptions.
The OPEC cut its forecast for oil demand growth in 2019 in its monthly report and said rising challenges in some emerging and developing countries could negatively impact global economic growth. OPEC said that it expected demand growth of 1.41 million bpd in 2019, a 20,000-bpd downgrade from its previous forecast.
On the technical front, the RSI is currently at 67.2% and suggests that the market can move in the upward direction. The %K has crossed the % D from below to the upside at 28.85%, and this suggests that the market may head upwards. The current price is above the MA5.So, overall the market setup seems to be positive.
Trade Suggestion-Limit Buy At 70.50, Take Profit At 71.50 Stop Loss At 70.00