- WTI has advanced to $ 78.00, an increase of $ 4.0 from previous weekly lows and back to pre-Omicron levels.
- Oil prices ignored a bearish weekly US oil inventory report as post-OPEC + meeting optimism continues.
Oil markets They ignored weekly bearish US inventory numbers and are on the rise, with first month WTI futures breaking above resistance at $ 77.50 to now trade at the $ 78.50 zone. That marks its highest price since Nov. 25, the day before Omicron fears swept the financial markets, and WTI is now up about $ 4.0 from previous weekly lows. Short-term bullish oil speculators are likely to target a test of a key support level that turned resistance from mid-November around $ 79.30. The most notable support on the downside is around $ 77.50 and the 50-day moving average is below $ 76.00.
There has been no notable catalyst for Wednesday’s bullish move. Traders continue to see OPEC + decision on Tuesday to go ahead with pre-existing plans to increase production by 400,000 barrels per day in February. Some have taken the decision as a vote of confidence in the ability of the oil market to absorb more supply. Meanwhile, Barclays analysts noted that “while OPEC + raised its production target, it will likely have a difficult time reaching it, as members such as Nigeria, Angola and Libya face difficulties in increasing production.” “OPEC + has taken the path of least resistance (political) as it continues to stay on course with increasing production targets,” the bank continued, “but actual incremental supplies are likely to be much lower, similar to the effect Omicron Lawsuit “.
Elsewhere, oil prices ignored a bearish weekly crude oil inventory report from the US EIA. To recap the details, crude oil stocks saw a lesser-than-expected drop of 2,144 million. barrels (versus 3,283 million expected), gasoline stocks registered a massive accumulation of 10,128 million barrels (versus 1,775 million expected) and distillates experienced a large accumulation of 4,418 million barrels (versus 1,525 million expected) . The report wasn’t that surprising given that API’s alternate private inventory report released Tuesday also showed large gasoline and distillate inventory build-ups.
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