WTI crude oil prices have corrected from their recent high but have been trading weak over the last three sessions in anticipation that OPEC may agree to increase global supply in a meeting this week. Also, Saudi Arabia will decide if it will end its voluntary 1.0 million BPD cut in crude production.
However, geopolitical risks in the Middle East are likely to keep oil prices firm. Israel said it launched missile strikes on Iranian targets in Syria over the weekend in retaliation for an Iranian attack on an Israeli cargo ship in the Gulf of Oman last week.
Also, crude oil prices are likely to find support from global PMI data which is indicating progress in energy demand from the COVID hit economy.
The US February ISM manufacturing index rose +2.1 to 60.8, against expectations of +0.2 to 58.9. The Eurozone February Markit manufacturing PMI was revised upward to 59.9 from the previously reported 57.7, Japan's February Jibun Bank manufacturing PMI was revised upward to 51.4 from the previously reported 50.6. However, the China February manufacturing PMI fell -0.7 to 50.6, against expectations of -0.3 to 51.0
According to the CFTC Commitments of Traders report for the week ended Feb. 23, net long for crude oil futures fell by 2,873 contracts to 5,11,840 for the week. Speculative long position sank by14,214 contracts, while shorts declined by 11,341 contracts.
Baker Hughes reported last Friday that active US oil rigs rose by +4 rigs in the week ended Feb. 26 to a 9-3/4 month high of 309 rigs, well above August's 15-year low of 172 rigs.
As per the last weekly EIA report, US crude oil inventories as of Feb. 19 were +0.3% above the seasonal 5-year average, gasoline inventories were +0.8% above the 5-year average, and distillate inventories were +3.2% above the 5-year average. As per EIA, US crude oil production in the week ended Feb. 19 fell -10.2% w/w to a 5-1/2 month low of 9.7 million BPD and is down by -3.4 million BPD (-26%) from last February's record-high of 13.1 million BPD.
Crude oil prices are likely to find support near 50 days EMA at $55.61 per barrel while key resistance levels are seen around $62.38 and $64.13 per barrel.