API reports surplus while the market awaits EIA report

The North American oil benchmark, WTI is upbeat today as the members of the OPEC are sitting down in Vienna to conclude a landmark deal. WTI is currently trading at $48.4 per barrel and Brent at 450.7 per barrel.

Key factors at play in crude oil market –

• OPEC members are meeting in Vienna today to conclude a deal that could saw production being cut by the OPEC cartel in tune of 1.2 million barrels.
• The meeting has started at 10:00 GMT. After an opening session, members would sit down in a closed-door session at 12:00 GMT and the press conference is scheduled at 16:00 GMT.
• Major sticking points are burden sharing of production cut and Iran’s production aim to reach pre-sanction level.
• Russia hasn’t confirmed but expected to join the cuts.
• 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 717,000 barrel increase 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.