Shrinking US Crude Reserves Might Confirm the Trend Now! / Commodities / Crude Oil

Oil prices rose again on Tuesday,approaching multi-year highs amid concerns over steadily shrinking US crudereserves.

FundamentalAnalysis

U.S. API Weekly Crude Oil Stock:

Inventory levels of US crude oil, gasoline and distillates stocks, AmericanPetroleum Institute (API) via Investing

Regarding the API figures publishedTuesday, the increase in crude inventories (with 2.318 million barrels versus1.650 million barrels expected) implies weaker demand and is normally bearishfor crude prices. However, we have a strongly bullish context, where the supplyis still voluntarily – or not – narrowed by the OPEC+ and the global demandincreases. What has to be synthesized from this report are the consecutivelydecreasing figures week-on-week, which are lifting prices higher.

Today, we have to see whether or notthese figures will be confirmed by the weekly Energy InformationAdministration's (EIA) report… But there is very little doubt that they won’tbe, given the current environment in which black gold is progressing.

GeopoliticalContext

On the international scene, a meetingbetween Iran and the European Union is likely to happen fairly quickly sincethe Iranian deputy minister in charge of the nuclear issue, Ali Bagheri, willmeet with an European negotiator Enrique Mora this week in Brussels to discussa resumption of negotiations in Vienna. There is no need to specify that if thenegotiations are successful, the easing of sanctions will lead to the return ofa large-volume market of black gold, which is currently under embargo.

Chart



WTI Crude Oil (CLZ21) Futures (December contract, daily chart)

Tosum up, we now have some context on how the oil market might develop in theforthcoming days, with some events and news to monitor, as they could have amoderated to strong impact on the ongoing lack of supply…

Inour daily alerts, we also analyze other markets and assets (ETFs, Futures,MLPs, stocks, etc.) of the oil and gas sector in order to get some exposure tothe energy industry. Regarding natural gas, yesterday we provided a new tradeplan to our members, following thelast trading position, which successfully hit all the projectedtargets.

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Thank you.
Sebastien Bischeri

Oil & Gas Trading Strategist
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