Oil Prices Continue Climb HigherPosted 10/25/2019 7:35AM CT |
Oil prices have continued to rally and have broken out of their multi-week consolidation despite continual soft economic data from Europe and Asia, which has only served to heighten demand concerns. This comes amidst conflicting stockpile reports from the EIA and API this week, as EIA reported a 1.7 million barrel decline in U.S. crude oil stocks while API reported a larger than expected build of 4.45 million barrels. Earlier in the week, there were reports that OPEC would discuss expanding productions cuts at their December meeting as well as enhance compliance standards. However, that was debunked by Russian Oil Minister Novak who stated that no formal proposal had been put forward. Further, China’s import quota was expected to increase by the end of the year, which provided underlying support. Despite record production levels in the U.S., net exports showed nearly the highest reading on record at 3.685 million barrels a day and with a drastic drop in imports (lowest since May 95), the market should continue to remain fairly supported with outlook orienting more towards OPEC and global demand concerns. This is not to discount the ongoing geopolitical risk factors, which remain at the forefront. The market is now neutral trend trend with today’s range seen between 52.25 – 56.17.