WTI HITS 2019 HIGH OF $55.75 ON VENEZUELA SANCTIONS, OPEC
WTI Crude futures are currently trading at $54.25-lower by 1.96% as compared to the previous closing. Earlier in the session, the contract hit a 2019 high of $55.75. Crude prices rose today as OPEC-led supply cuts and U.S. sanctions against Venezuela’s petroleum industry offset forecasts of weaker demand and an economic slowdown.
Brent crude futures were trading at $62.00-lower by 1.30% as compared to the previous closing. The contract hit $63.63 a barrel earlier in the session. It was its highest level since 7th December.
The OPEC and its allies began a new round of supply cuts in January. These curbs, led by Saudi Arabia, have been compounded by involuntary losses that the Venezuelan sanctions could deepen.
OPEC supply dropped in January by the largest amount in two years, according to market sources. That offset limited compliance with the output-cutting deal so far by non-OPEC Russia.
Energy services firm Baker Hughes said in its weekly report on Friday that the U.S. energy firms last week decreased the number of rigs looking for new oil to 847. It was the lowest oil rig count in eight months and lend some support to prices.
The main drag on oil prices has been fear of a possible slowdown in demand this year due to a weaker outlook for economic growth and developments such as the U.S.-China trade dispute.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 1st February on Tuesday. Previously, the API reported that U.S. crude supplies rose by 2.098 million barrels for the week ended January 25. The EIA will report US crude inventories for the week ended 1st February on Wednesday. Previously, the EIA reported that U.S. crude inventories rose by 0.919 million barrels for the week ended January 25.
On the technical front, the RSI is currently at 57.59% and suggests that the market can move in the downward direction. The current price is below the MA5. The current price is above the middle line of the Bollinger Bands but is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Stop Sell At 54.20 Take Profit At 53.50 Stop Loss At 54.50