Both Brent and WTI is facing selling pressure and has declined for six consecutive days. Brent is trading at $55.8 per barrel and WTI at $5.5 per barrel discount.
Key factors at play in crude oil market –
- Rumors suggest that the support for OPEC agreement fading. Some members want a revision in quotas. Venezuela has called for a renegotiation of the OPEC agreement.
- Venezuela calls for oil trade in ruble and yuan.
- Nigeria said to resist pressure on production cuts.
- US sanctioned Venezuela and barred its access to U.S. dollar.
- OPEC not compliant to the deal for a third consecutive month.
- OPEC production declined by 79,000 barrels per day m/m, after an increase of 173,000 barrels per day in July and after rising by 393,000 barrels per day in June compared to the previous month. In May production increased by 366,000 barrels per day.
- UAE looking to boost production capacity to 3.5 million barrels by the end of 2018.
- OPEC YTD compliance at 87 percent and non-OPEC compliance at 67 percent.
- Due to Harvey, production declined to 8.78 million barrels per day. However, production has jumped to 9.55 million barrels per day.
- The oil market is in backwardation, both Brent and WTI.
- API reported a draw of 4.08 million barrels of crude oil.
Today’s inventory report from US Energy Information Administration (EIA) will be released at 14:30 GMT.
Trade idea –
- Active call - Buy WTI targeting $56 per barrel.
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