Oil prices recorded impressive gains at the mid-week trading session in Asia after the recently released API’s data showed energy demand at the world’s largest economy wasn’t as bad early anticipated in many quarters.
At the time this report was drafted, Brent crude oil prices broke above its strong resistance level of $43.50/barrel, and showed it had enough gas to breach the $45/barrel mark, amid impressive demand for energy seen lately in the world’s largest economy.
That said the West Texas Intermediate also recorded impressive gains, trading comfortably above $41/barrel.
Data retrieved from the American Petroleum Institute revealed a surprising drop in U.S crude oil Stockpiles by 5.147 million barrels for the week ending November 6.
Oil experts had earlier suggested an inventory drop of just 913,000 barrels.
Sequel to this impressive macro prevailing now, energy demand in America seem to be ticking up, on reports showing the American economy printed a large drop in oil inventories of 8.01-million barrels after experts had predicted a gain of 890,000 barrels for the week, meaning the world’s largest economy was back on track at least on the near term.
Oil traders had earlier increased their bullish positions on the bias that the oil cartel group recently disclosed that it would consider pushing the current round of crude oil production cuts beyond early next year.
Oil bulls are also roaring loud on strong macros revealing energy demand could significantly improve, especially when Pfizer’s COVID-19 vaccine hit the market, on the bias that restriction on social mobility would be lifted, coupled with the resumption of air travels might push oil prices above the $50/barrel price level before mid-next year.
However, in the near term, the odds still looks cloudy for the black liquid fossil on reports that a pending legal tussle between the two major U.S political parties over the just concluded U.S election might restore growing geopolitical concerns and keep oil prices ranging.
So, it is fair to say oil traders sentiment remain skewed towards being careful at least till the end of 2020 on the fundamental that energy demand will likely drop, as winter months in the Northern Hemisphere comes to play between now and 2020, meaning it’s unlikely for Crude oil prices to breach above $47.50/barrel anytime soon.
