Summary:
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Oil and Oil.WTI both set for a solid day of gains
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Libyan supply outage continues
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US inventory data pending
There’s been steady gains seen in the energy complex today with both Oil and Oil.WTI rising thanks to an improving risk sentiment and a drop in Libyan output. The gains come after some heavy losses seen at the start of the week which has received a moderate boost after news that the National Oil Company in Libya declared a “force majeure” on exports from the El Sharara oilfield.
Oil has gained today but is still under some pressure after some heavy recent declines. The market remains in the range that has been in place for much of the month. Source: xStation
This is the country’s biggest oilfield and was seized last weekend by a militia group. The shutdown is expected to result in a production loss of 315,000 barrels per day, and an additional loss of 73,000 bpd at the El Feel oilfield. OPEC, together with non-members such as Russia and Oman, last week agreed to cut crude output by a joint 1.2 million bpd from January to help balance supply and demand. Russia said on Tuesday it plans to cut its oil output by 50,000 to 60,000 bpd in January, as part of a gradual means of meeting its commitment under the deal to cut by 220,000 bpd.
Tonight will see the private US inventory figures released at around 9:30 PM with an expected reading of -2.9M after last weeks build of +5.4M. This figure is known as the API and often sets expectations for tomorrow’s more widely viewed DOE number which at present has a median forecast of -2.9M after last week’s large drop of -7.3M.
Oil remains in a longer term downtrend but price has recovered back to the 8 EMA (blue line). The market is consolidating after a large decline and a break below 57.80 or above 63.70 will end this pause and could well lead to the next sustained move. Source: xStation
