API reports deficit while the market awaits EIA report

The North American oil benchmark, WTI is enjoying the optimism surrounding the OPEC deal. In September, OPEC unexpectedly delivered a framework for the deal, so there are reasons to be optimistic.

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 33.8 million barrels.
• OPEC members are set to meet in Vienna on November 30th to finalize the deal.
• 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.
• Russian President Putin and energy minister Novak have expressed confidence in reaching agreements.
• Iraq has called for an exemption from the deal as they don’t want to cut production. OPEC members need to take cuts in order to abide by 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 37 percent from its bottom.
• API report showed 1.28 million barrel decrease in weekly crude oil stock. However, Gasoline stocks rose by 2.68 million barrels.

Today’s inventory report from US Energy Information Administration (EIA) will be released at 15:30 GMT. Trade idea –

• A successful OPEC deal likely to push crude oil prices to $59 per barrel first and then towards $68 per barrel, however with a failure, WTI could soon be hovering below $28 per barrel. WTI is currently trading at $47.5 per barrel.