WTI is struggling to make a directional move, being trapped by the force of both bulls and the bears. While the possibility of a production freeze agreement is providing support to crude benchmarks along with a weaker dollar, high level of oil inventories weigh.

Key factors at play in Crude market

• Iran has indicated that it is ready to support production freeze if it stabilizes the oil market, however, it said that it would like to see the prices around $50-60 per barrel.
• Saudi Arabia and Russia have formed a working group that will study, ways to reduce volatility in the market.
• Iraq plans to sell oil through Iran.
• Oil market glut has shifted from crude oil to gasoline.
• Recent research by Rystand Energy has revised US crude reserve upwards to 264 billion barrels, more than Saudi Arabia and Russia.
• U.S. oil production has dropped to 8.5 million barrels/day and likely to drop further. It has declined more than a million barrel from the peak but up from its low of 8.43 million barrels per day.
• Active oil rigs in the US have been climbing and up more than 25 percent from its bottom.

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

Trade idea

• While the oil benchmarks benefit from weaker dollar, but the real focus would be on the informal meeting the OPEC members would hold later this month in Algeria. A broad consensus might  get reached, even if a production freeze deal is not reached.
• WTI is currently trading at $45 per barrel and the Brent at $2.5 per barrel premium.