By Barani Krishnan
Investing.com – The oil rebound couldn’t last beyond a day, as many correctly guessed.
And with U.K. Brent back to trading under $60 per barrel, the waiting game is on to see how long U.S. West Texas Intermediate will hold its $50 support.
Traders are also eager to see if the first U.S. crude stock draw in 10 weeks will happen.
Speculation of an inventory deficit helped oil prices stay briefly higher for a second-straight day on Tuesday, keeping WTI well above $50, albeit on thin volume. But as trading progressed toward noon, the bullish sentiment faded.
By 12:25 PM ET (17:25 GMT), was down 97 cents, or 1.9%, at $50.66 per barrel, erasing most of Monday’s 2.4% gain The session low was $50.31. WTI remains about 35% below four-year highs of nearly $77 a barrel hit in early October. On Friday alone, it fell 8%, plumbing a 13-month low of $50.16.
, the global benchmark for oil, slid $1.09, or 1.8%, to $59.47 per barrel after the previous session’s gain of around 2%. Brent remains more than 30% below four-year highs of around $87 per barrel struck early last month. On Friday, it fell more than 5%, shattering the $60 support that had been its perch since July 2017.
The American Petroleum Institute will issue at 4:30 p.m. ET (21:30 GMT) a snapshot of what last week’s U.S. crude supply and demand could have been, ahead of Wednesday’s official data from the Energy Information Administration. Figures from the two have diverged in the past, with the API’s smaller sampling sometimes even getting the direction of the data – build or draw – wrong. But lately, the industry group has been more accurate on this.
Consensus shows forecasters calling for a of 600,000 barrels for the week ended Nov. 23.
Some estimates were naturally much higher.
“I’m thinking of a crude draw of up to 3 million barrels from a refiner ramp up in gasoline production,” said Phil Flynn of Price Futures Group, who typically has a bullish outlook on oil. “But I think we’ll see sufficient drop in gasoline and distillate products as well from real demand.”
Any U.S, crude stockpile deficit would be the first since the week of Sept. 26 after the eye-watering inventory build of nearly 53 million barrels over nine-straight weeks.
Stockpiles aside, the market was also supported earlier in the day on rumblings that OPEC may do a production cut after all at its Dec. 6 meeting, defying President Donald Trump’s persistent tweets that oil from the Saudi-led cartel should be free flowing and at lower prices, too.
Bloomberg reported that 31 analysts and traders from a global poll of 36 predicted that the OPEC+ coalition, which includes non-member Russia, will announce output curbs when it gathers on Dec. 6 to 7. The average estimate for the size of the cut was 1.1 million barrels a day.
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Source: Investing.com
