Commodity Market: US Crude Oil extends gains as OPEC+ sticks to reduced output policy, US oil stockpiles drop

Futures on US West Texas Intermediate Crude Oil rose for a fourth straight trading day on Thursday after OPEC+ maintained oil production cuts, while crude oil inventories in the United States dropped to levels not seen since March 2020.

During a meeting on Wednesday, the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, decided to extend the current oil production policy at a time when outlook for demand recovery remains uncertain due to the pandemic.

“Crude prices have been rising higher now that OPEC+ has convinced the energy market that they are determined in accelerating market re-balancing without delay,” Edward Moya, senior market analyst at OANDA, was quoted as saying by Reuters.

Additional support for the black liquid came after the US Energy Information Administration (EIA) reported on Wednesday that crude oil inventories had dropped by 0.994 million barrels during the week ended January 29th to 475.7 million barrels, or their lowest level since March 2020. In comparison, analysts on average had expected a 0.446 million barrel increase in inventories last week.

OANDA’s Moya also noted that progress in coronavirus vaccine roll-out was another key driver of oil prices.

“The world now has several effective COVID vaccines that should really force energy traders to upgrade their return to pre-pandemic behavior forecasts,” Moya said.

As of 9:50 GMT on Thursday WTI Crude Oil Futures were gaining 0.61% to trade at $56.03 per barrel, while moving within a daily range of $55.77-$56.25 per barrel. Yesterday the commodity climbed as high as $56.33, or its strongest price level since January 22nd 2020 ($59.22 per barrel). WTI Crude Oil Futures have risen 7.36% so far in February, following another 7.58% surge in January.

Brent Oil Futures were edging up 0.10% on the day to trade at $58.70 per barrel, after earlier touching an intraday high of $59.00, or their strongest level since February 21st 2020 ($59.22 per barrel). Brent Oil Futures have risen 6.78% so far in February, following another 6.38% surge in January.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $55.61
R1 – $56.41
R2 – $57.13
R3 – $57.93
R4 – $58.73

S1 – $54.89
S2 – $54.09
S3 – $53.37
S4 – $52.65

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $58.36
R1 – $59.20
R2 – $59.76
R3 – $60.60
R4 – $61.44

S1 – $57.80
S2 – $56.96
S3 – $56.40
S4 – $55.84