Crude Oil prices are trading lower from the last two trading sessions, following strength in the Dollar Index, and weak demand forecast from an International Energy Agency (IEA) monthly report. Global jet fuel demand is also keeping a cap on oil prices, due to travel restrictions in many countries, following a fresh breakout of coronavirus cases.
The IEA cut its 2021 global oil demand forecast by -200,000 bpd, to 96.4 million bpd, from 96.6 million bpd, in its monthly report. The IEA also sees non-OPEC+ crude supply climbing by +830,000 bpd in 2021. Meanwhile, data from the Official Airline Guide (OAG) shows that weekly scheduled airline flights globally were down 47% from a year ago, and were down -39%, based on daily actual commercial flight tracking by FlightRadar24. Travel restrictions are likely to keep a cap on the current oil prices rally.
Meanwhile, US crude oil inventories, as of Feb. 5, were +1.8% above the seasonal 5-year average, gasoline inventories were -0.1% below the 5-year average, and distillate inventories were +6.9% above the 5-year average as per a recent EIA report .
US crude oil production in the week ended Feb. 5 rose +0.9% w/w, to 11.0 million bpd, and is down by -2.1 million bpd, from the record high of 13.1 million bpd.
Crude oil prices are likely to trade firm, while above the key support levels around the 20- days EMA at $55.16, and the 50-days EMA at $51.53. Meanwhile, an immediate resistance is seen around $59.55 and $60.50 levels.