Investing.com – The oil rally is slowing and bulls are awaiting the next big thing, either a breakthrough in U.S.-Sino trade talks or another impactful number on Saudi production cuts, to take the market higher.
Until then, their game could be to sit tight on this week’s gain of nearly 10% — the most for a week since November 2016 — and shut out any “market noise” that could spark a substantive correction.
New York-traded settled up a meager 23 cents, or 0.4%, at $52.39 per barrel, after making a new 2019 high at $52.70.
London-traded , the global oil benchmark, was up 17 cents, or 0.2%, at $61.61 by 3:00 PM ET (20:00 GMT), after rising to $61.91 earlier, the highest so far for this year.
“(T)he bulls are trying to keep it together and waiting for the next big driver to emerge,” said Gene McGillian, director of energy research at Tradition Energy in Stamford, Conn.
Just two weeks ago, oil was in a bear market, with WTI down 40% on Christmas Eve from four-year highs hit in early October. U.S. crude futures have gained more than 23%, re-establishing a bull market, in a remarkable turnaround spurred by Saudi production cuts and optimism over trade talks between U.S. and Chinese delegations.
Wednesday’s trading alone brought a 5% gain after Saudi Enery Minister Khalid al-Falih, vowing to rebalance the market, said the kingdom was pumping approximately 800,000 barrels fewer a day from a record high of 10.2 million barrels per day in November. The amount Riyadh would ship overseas in February would be another 100,000 bpd fewer than January’s 7.2 million bpd, he added.
Falih’s remarks, along with positive news on a huge Saudi bond issue and listing plans for the kingdom’s state oil company, helped bulls seized the narrative from a particularly bearish weekly dataset released by the U.S. Energy Information Administration.
fell by 1.68 million barrels for the week ended Jan 4, about a third less than the 2.4 million-barrel draw forecast by analysts, the EIA said. On the products side, rose by 8.07 million barrels, more than double the expected build of 3.39 million barrels. , which include diesel and , increased by 10.61 million barrels, compared to forecasts for a gain of 1.89 million.
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Source: Investing.com
