Oil Price - March 19

[dan_s]

West Texas Intermediate (WTI) reached a near four-month high this morning as OPEC+ producers decided to extend supply cuts until their June meeting, when they will revisit the subject. Saudi Arabia has in fact announced there won't be a summit in April, raising questions over the decision to delay discussions on output. Technically, U.S. crude climbed for the sixth day out of seven on March 18, after completing a pennant, following a H&S bottom. The next test would be the 200 DMA, above $61.

Saudi Arabia, OPEC’s de-facto leader, and Russia both made promises over the weekend to increase compliance with the deal to cut oil output by 1.2 million barrels per day (bpd) in the first six months of this year, while Saudi oil minister Khalid al-Falih told reporters on Monday that the market is still oversupplied.

“OPEC and its ally Russia are betting that their mantra of production cuts will continue kicking oil prices higher and the market seems to be buying that -- for now,” Investing.com analyst Barani Krishnan commented.

Krishnan noted that many investors expect West Texas Intermediate to breach $60 a barrel “in the coming days” as a first step towards reaching the $80 dollar level that Saudi officials have tagged as the level needed to fund the kingdom’s budget.

[dan_s]

"Provided that the global economy avoids recession or a prolonged slowdown this year, the oil market will tighten progressively over the course of 2019. Given their approach last year, Saudi Arabia and OPEC+ are likely to prolong their output restraint until Brent prices are well above $70, perhaps breaching $80." - John Kemp at Rueters

Read: https://www.reuters.com/article/oil-pri ... SL5N20F621

[dan_s]

After the markets closed on Tuesday, March 19 the American Petroleum Institute (API), an industry group, released its weekly crude oil stock report. It mentioned a surprise draw of -2.1 million in inventories to 446.8 million versus market expectations of +0.3 million addition at the end of the week to March 15.

If this is confirmed by EIA on Wednesday morning, it may be enough to push WTI over $60/bbl.

The API and EIA reports are often quite different.