API reports deficit, while WTI awaits EIA report: call updated

Though it has been gaining some ground WTI has been hit pretty hard this week. $50 per barrel is posing as major resistance since the UK referendum.

Key factors at play in Crude market –

• Recent research by Rystand Energy has revised US crude reserve upwards to 264 billion barrels, more than Saudi Arabia and Russia.
• Goldman Sachs has called that crude recovery is over and price may once again drop lower.
• However, both OPEC and IEA have said that oil market is moving to a balance in the second half of this year.
• Canada’s production is under recovery after wild fire shut down 1.8 million barrels/day.
• Nigeria and Venezuela still facing troubles with production and outages. Militants in Nigerian delta has declined to a ceasefire.
• U.S. oil production has dropped to 8.62 million barrels/day and likely to drop further.
• Major supply increase is taking place from the Middle East. Iran’s output rose 80,000 barrels/day in May to 3.84 million barrels/day. Saudi Arabia is expected to increase production to 11 million barrels/day.
• India has emerged as the biggest incremental crude buyer this year.
• American Petroleum Institute’s (API) weekly report showed inventory declined by 6.7 million barrels.

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

Trade idea –

• WTI is down after referendum vote, however, the bulls haven't given up on $60 per barrel yet. As of now, $46 per barrel level is holding out pretty strong.