U.S. crude is showing little movement in the Monday session. In North American trade, WTI crude futures are trading at the $54.04, marking a two-week high. Brent crude futures have improved to $56.18, as the Brent premium stands at $2.18. U.S. markets are closed for Presidents’ Day, so we can expect limited movement from crude for the remainder of the day.
Federal Chair Janet Yellen gave the U.S. economy a thumbs-up last week. Next up is the Fed policy minutes, which will be released on Wednesday. Testifying before Congress last week, Yellen noted that inflation is moving towards the Fed’s 2 percent target, the labor market remains red-hot and consumer spending is strong. Yellen strongly hinted that a rate hike was imminent, leaving the markets to speculate if the Fed prefers to make a move in March or June. If the U.S. economy stays on track in 2017, analysts expect two or three rate hikes of a quarter-point. At the same time, the Fed wants to take into account the economic stance of the new administration, but this remains an elusive goal.
Donald Trump continues to have difficulty filling in key cabinet positions and the media continues to probe connections between Trump officials and Russia. Trump has fired back by bitterly attacking the media, and lost in the mayhem is a clear and coherent economic policy. Although Trump has been in office for just over a month, the perception of a muddled and disoriented White House is creating uncertainty in the markets, and is, as Trump would say, “bad for business”.
As more U.S. oil rigs continue to jump into the market, U.S. crude stockpiles continue to record sharp surpluses. Last week, crude oil inventories jumped 9.5 million barrels, crushing the estimate of 3.7 million. This marked a sixth straight surplus, all of which beat their estimates.
The Energy Information Administration has projected that U.S. production in 2017 will be the highest since 1970. This surge in U.S. drilling could spell trouble for OPEC and Russia, which recently signed an agreement to lower production, in the hope of raising prices. The OPEC agreement came into effect on January 1, and analysts have noted that compliance with production cuts is at a record 90 percent. Despite these impressive numbers, U.S. crude is slightly lower since the agreement took effect.
WTI/USD Fundamentals
Monday (February 20)
- There are no U.S. releases on the schedule
WTI/USD for Monday, February 20, 2017
WTI/USD February 20 at 11:15 EST
Open: 53.83 High: 54.24 Low: 53.73 Close: 54.04
WTI USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 40.57 | 46.54 | 52.22 | 58.32 | 65.05 | 72.99 |
WTI/USD has showed limited movement in the Monday session, remaining close to the $54 level.
- 52.22 remains a weak support level
- 58.32 is the next resistance line
- Current range: 52.22 to 58.32
Further levels in both directions:
- Below: 52.22, 46.54, 40.57 and 33.22
- Above: 58.32, 65.05 and 72.99