CRUDE OIL BULLISH AS INVENTORIES DECLINE
WTI Crude is currently trading at $69.12-higher by about 0.9% from the last closing. Crude oil rose on Wednesday supported by news of a fall in Iranian crude supplies and decline in U.S. inventories.
Due to pressure from Washington, many crude buyers have already reduced orders from Iran, OPEC’s third-biggest producer .According to Thomson Reuters Eikon trade flow data, Iran’s crude oil and condensate exports were set to drop below 70 million barrels for the first time since April 2017. The report came as markets wait for a second round of U.S. sanctions on Tehran to kick in on November 4.
Benchmark Brent crude oil was up 50 cents at $76.45 a barrel by 1330 GMT on Wednesday.
The U.S. Energy Information Administration stated in its weekly report on Wednesday that crude oil inventories fell by 2.566 million barrels in the week ended on 24th August. Markets had expected a crude-stock draw of 0.686 million barrels, while the American Petroleum Institute late Tuesday reported a supply increase of 0.038 million barrels.
The EIA also said that Supplies at Cushing, Oklahoma increased by 0.058 million barrels in the last week. Total U.S. crude oil inventories stood at 405.8 million barrels as of last week, according to press release, which the EIA indicated was “at the five year average for this time of year”.
Elsewhere, on the ICE Futures Exchange in London, Brent Oil for November delivery traded up 61 cents to $76.90 by 15:36 GMT, compared to $76.56 before the release.
Brent’s premium to the WTI crude contract stood at $7.72 a barrel by 15:38 GMT on Wednesday, compared to $7.76 by close of trade on Tuesday.
On the technical front, the RSI is currently at 58.76% and suggests that the market can move in the upward direction. The %K has crossed the % D from below to the upside at 11.18%, 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: 68.95, Take Profit At: 69.40 Stop Loss At: 68.72