Commodity Market: US Crude Oil consolidates after a surprise US inventory drop, US-Iran nuclear talks in focus

Following a Wednesday rally on the back of a surprise US crude inventory drop, futures on US West Texas Intermediate Crude Oil were in consolidation mode on Thursday ahead of the outcome of US-Iran nuclear talks.

A potential agreement could lift US sanctions on Iran’s oil and ease supply tightness worldwide.

“The restoration of sanction waivers to Iran to allow international nuclear cooperation projects, which were announced last week, along with some positive comments from Russian diplomats, suggest that the parties are moving closer towards a deal,” Warren Patterson, ING’s head of commodities research, was quoted as saying by Reuters.

“Any quick deal would likely put some further downward pressure on prices, as it would help alleviate some concerns over the lack of spare OPEC capacity,” he said.

Meanwhile, the official report by the US Energy Information Administration (EIA) showed on Wednesday crude oil inventories had decreased by 4.8 million barrels during the week ended February 4th to 410.4 million barrels, or the lowest level since October 2018. Analysts on average had anticipated a much smaller inventory build – by 1.775 million barrels.

US product supplied reached a historic high of 21.9 million barrels per day over the past 4 weeks, with demand supported by strong economic activity nationwide, the EIA said.

As of 10:06 GMT on Thursday WTI Crude Oil Futures were gaining 0.42% to trade at $90.04 per barrel. Last Friday the black liquid rose as high as $93.17 per barrel, which has been its strongest price level since September 30th 2014 ($94.90 per barrel).

At the same time, Brent Oil Futures were inching up 0.02% on the day to trade at $91.70 per barrel. On Monday the commodity rose as high as $93.96 per barrel, which has been its strongest price level since October 3rd 2014 ($94.03 per barrel).

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

Central Pivot – $89.55
R1 – $90.69
R2 – $91.72
R3 – $92.86
R4 – $94.00

S1 – $88.52
S2 – $87.38
S3 – $86.35
S4 – $85.32

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

Central Pivot – $91.27
R1 – $92.45
R2 – $93.23
R3 – $94.41
R4 – $95.60

S1 – $90.49
S2 – $89.31
S3 – $88.53
S4 – $87.76