WTI rallies hard by 3.7%, trade news & EIA data bullish
- EIA reported that U.S. crude supplies fell by 4.9 million barrels.
- OPEC+ meets on Thursday and Friday.
- Sino/US trade news was upbeat, lifting spirits.
The price of oil has been solid on Wednesday, rallying some 3.7% to a high of $58.64 from a low of $56.26. Bulls got a step ahead of the Organization of the Petroleum Exporting Countries (OPEC+) headlines today after US government data showed the first decline in US inventories in six weeks.
Positive Sino/US trade news lifts investor spirits
The trade news was upbeat today, with Bloomberg writing:
that the US and China are "moving closer to agreeing on the number of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang."
"The people, who asked not to be identified, said that U.S. President Donald Trump’s comments Tuesday downplaying the urgency of a deal shouldn’t be understood to mean the talks were stalling, as he was speaking off the cuff. Recent U.S. legislation seeking to sanction Chinese officials over human-rights issues in Hong Kong and Xinjiang are unlikely to impact the talks, one person familiar with Beijing’s thinking said."
The Energy Information Administration reported that U.S. crude supplies fell by 4.9 million barrels for the week ended November 29th. This, coupled with good news on the trade deal front helped to boost sentiment in energy markets and helped to extend WTI's gains across the rising trend line support established in the begging of October's business from down in the $51 handle.
OPEC+ meeting on Thursday and Friday will be critical
OPEC+ meets on Thursday and Friday where traders await a decision from them to extend and deepen output cuts. However, the Saudis have threatened to boost their own production following failures of other members to fully comply with current output reductions.
WTI levels