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Article / 01 March 2017 at 12:56 GMT

Oil remains deadlocked ahead of US inventory report — #SaxoStrats

Ole Hansen

Head of Commodity Strategy / Saxo Bank

Denmark

Brent and WTI have both returned to their one-month average prices
Focus is on weekly inventory reports at 1530 GMT this afternoon
Bloomberg anticipates inventories will move close to 522 million barrels
Crude stuck in tight ranges, February WTI's tightest monthly range in 14 years
Despite continued buying, WTI gained just $1.2/barrel over the month

By Ole Hansen

Brent and WTI crude oil have both returned to their one-month average prices with the focus being the weekly inventory report from the Energy Information Administration later today at 1530 GMT.

A Bloomberg survey sees inventories rising by 3 million barrels, which would bring the total to another record of close to 522 million barrels. The market will also focus on export and import data following the latest surge in export and reduction in imports.

Initial weakness on Tuesday was driven by gasoline following reports – later denied – that the White House was consider a proposal to change biofuel blending rules. The denial let to swift recovery which also help bring oil back to unchanged on the day.

RBOB Gasoline roller-coaster Tuesday

Source: SaxoTraderGO

Both Brent and WTI crude oil remain stuck, seemingly unable to find enough reason to break out of their months-long trading range. WTI crude oil bounced around within a $3.72/bl range during February, the tightest monthly range in nearly 14 years. Despite continued fund buying it only managed to finish the month $1.2/bl higher.

WTI is currently facing resistance at $55/bl and support at $52.70/bl while for Brent the levels are $57.50/bl and $55/bl.

Source: Saxo Trader

– Edited by Jack Davies

Ole Hansen is head of commodity strategy at Saxo Bank.

1y

Ole Hansen

No fireworks in today's inventory report. Oil inventories hit a new record while production climbed by 31k b/d. Exports were lower while imports recovered a bit after last weeks big fall. WTI and gasoline trading close to unchanged following the release.

1y

Ole Hansen

On balance a tad price negative but we have in previous weeks seen much more price negative reports being bought.

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