Oil Seeking Support – Floating Storage Back in Play
The crude oil price was higher yesterday after a recent run of bearish days. Yesterday’s gains were spurred by a bounce in stock markets, but also signs of tighter gasoline stocks in the weekly inventory release. The American Petroleum Institute (API) reported a rise in U.S. crude inventories for the week, which would mark the first rise in seven weeks
Oil has fallen from highs of $43.50 on August 26th after traders began to question the upside potential. Economic growth signals have been mixed for the global economy and rising virus cases have brought the threat of further lockdowns.
The trend in stockpiles was leading to another wave of large commodity traders booking tankers to store crude at sea again. Inventories have been rising despite oil production cuts from OPEC and lighter refinery operations due to lower demand.
Oil demand is still weak and other crude mixes, such as West African oil, have been under pressure. Nigeria was seeking buyers for exports planned last month and Angolan prices are weak with China slowing their demand.
Crude Oil Price Technical Outlook
Crude oil was higher yesterday for the first session in six and the price is trying to get back above $38.00, which was support on June 25th. The first target would be at $40.00 A lower close back through $37.00 could warn of further lows. The Investing Cube team is available for Trading Coaching. Newer traders should consider the Trading Course.