WTI Oil price is trading above $68, which is the highest level of Nov. 18. Increasing demand optimism in the US, UK, and Eurozone are likely to keep oil prices higher. The summer driving season officially got underway following the Memorial Day weekend, which has increased fuel consumption in the US, i.e. the largest energy consumer in the world.
Tracking firm GasBuddy said Sunday’s US gasoline demand jumped 9.6% above the average of the previous four Sundays, the highest Sunday demand since the summer of 2019.
However, negotiators between the US, Iran, and European nations in Vienna is likely to keep a cap on the prices. US Secretary of State Blinkin said getting a deal done is a "top priority."
Iranian Foreign Ministry Spokesman Saeed Khatibzadeh said that differences remain in talks to reinstate the 2015 nuclear agreement between Iran and world powers. Mr. Khatibzadeh said the main sticking points are around the sequencing of when parties will return to compliance and Iran's ability to verify that US sanctions have been lifted.
Meanwhile, the energy market’s focus will be shifting towards the OPEC+ meet later today. They are likely to consider the state of the energy market and the group's crude production policy. Expectations are for OPEC+ that it will remain firm to boost crude production and ratify an increase of +840,000 BPD scheduled for July, completing a three-part process to revive 2.0 million BPD of crude output that was halted during the pandemic.
Weekly EIA report showed that US crude oil inventories as of May 21 were -1.6% below the seasonal 5-year average, gasoline inventories were -2.9% below the 5-year average, and distillate inventories were -8.0% below the 5-year average. However, US crude oil production in the week ended May 21 was unchanged w/w to 11.0 million BPD and was down by -2.1 million BPD or -16.0% from the Feb-2020 record-high of 13.1 million BPD.
According to the CFTC Commitments of Traders report for the week ended May 25, net long for crude oil futures dropped by 457 contracts to 4,75,490 for the week. Speculative long position rose by 13,038 contracts, while shorts soared by 13,495 contracts.
WTI Crude oil prices are likely to trade firms while above the key support level of 20 days EMA of $65.47 and 50 days EMA $63.70 while it may face stiff resistance near $69.71 and $71.90