US Crude is steady on Wednesday as February futures are trading at $30.45 a barrel in the North American session. On the release front, Crude Oil Inventories posted a small surplus of 0.2 million, well below expectations. The next major release is Unemployment Claims, which will be released on Thursday.
Crude oil remains under pressure, as the commodity struggles at lows not seen since December 2003. Crude dipped below the symbolic level of $30 on Tuesday, sending shockwaves on global markets. The EIA weekly crude inventory report helped oil stabilize on Wednesday, as inventories were up 0.2 million, well below the forecast of 1.9 million. Still, total US crude inventories remain at all-time high levels, underscoring the huge glut of oil which continues to weigh on the price of crude. Crude has been hammered by the slowdown in China, the world’s second largest consumer of oil after the US. The New Year has started on ominous note, with the meltdown in the Chinese stock market and devaluation of the yuan exacerbating crude oil’s woes. Will the spiral continue? Experts such as Citigroup’s Ed Morse has stated that the plunge could continue, adding that US oil prices could drop as low as $20 a barrel. Adding to crude oil’s woes is the sharp rise of the US dollar against rival currencies. In a report published earlier in the week, Stanley Morgan stated that a 5 percent increase in the value of the dollar against a basket of currencies could push the price of oil down from 10-25 percent, which translates to $8 per barrel.
WTI/USD Fundamentals
Wednesday (Jan. 13)
- 10:30 US Crude Oil Inventories. Estimate 1.9M
- 13:01 US 10-year Bond Auction
- 14:00 US Beige Book
- 14:00 US Federal Budget Balance. Estimate -2.7B
Upcoming Key Events
Thursday (Jan. 14)
- 8:30 US Unemployment Claims. Estimate 275K
*Key releases are highlighted in bold
*All release times are EST
WTI/USD for Wednesday, January 13, 2016
WTI/USD January 13 at 9:10 GMT
WTI/USD Open: 30.69 Low: 30.11 High: 31.70 Close: 30.45
WTI/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 22.28 | 26.64 | 30.00 | 32.22 | 35.09 | 37.75 |
- WTI/USD was flat in the Asian session. The pair moved higher in the European session but has given up these gains North American trade.
- The round number of 30.00 remains a weak support level and could be tested during the North American session
- There is resistance at 32.22
Further levels in both directions:
- Below: 30.00, 26.64 and 22.88
- Above: 32.22, 35.09, 37.75 and 39.87