API reports build while the market awaits EIA report

Both Brent and WTI is facing selling pressure as OPEC output increases. Brent is trading at $56.4 per barrel and WTI at $5.8 per barrel discount.

Key factors at play in crude oil market –

• OPEC chief called on members to take up extraordinary steps to reduce the imbalance in 2018. OPEC remains confident that imbalance reducing.
• Nigeria said to resist pressure on production cuts.
• US sanctioned Venezuela and barred its access to U.S. dollar.
• Iraq remains the biggest cheater in OPEC in terms of the agreement.
• OPEC production increased by 88,000 barrels/day in September after declining by 79,000 barrels per day m/min August, and that after an increase of 173,000 barrels per day in July. In June production rose 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.
• Current U.S production at 9.54 million barrels per day.
• The oil market is in backwardation, both Brent and WTI.
• API reported a build of 3.1 million barrels of crude oil.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 15:00 GMT.

Trade idea –

• Active call - Buy WTI targeting $56 per barrel.

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