API reports deficit while the market awaits EIA report

The North American oil benchmark, WTI continues to gain on the optimism of the OPEC deal.

Key factors at play in crude oil market –

• OPEC members have agreed to a production freeze deal that would keep the OPEC production within the range of 32.5 -33 million barrels per day. OPEC currently produces 33.25 million barrels.
• The details of the deal would be finalized at the November meeting.
• Disputes between the OPEC secretariat and Iran, Iraq, and Venezuela have surfaced with regard to the production levels. These three countries accused the secretariat of under-reporting of their production levels.
• OPEC came out with a statement that such disputes won’t be a hindrance to the deal.
• Global oil inventory now stands at 3.1 billion barrels.
• Active oil rigs in the US have been climbing and up more than 35 percent from its bottom.
• API report showed 3.8 million barrel draw in weekly crude oil stock.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 14:30 GMT. Trade idea –

• Our call to buy WTI at $48 per barrel, targeting $53.5 per barrels stands. We have now extended targets to $68 per barrel. Stop loss is at $42-40 area.