9 Jun 2015
Cold feet! Oil's rally capped by US oil stocks
FXStreet (Orlando) - The Oil WTI rally from 58.00 has been capped at 60.35 as the crude's impetus got a cold feet following the EiA US Oil Stocks data that showed the US crude production hit 43-year high. The WTI trades now at 59.90 fter declining from 1-week highs at 60.35.
US crude oil production at highs since 1970s
According to the EiA, US crude oil production hit about 9.6M barrels per day in May, its highest level since 1972. The all-time high of about 10M barrels per day was in the early 1970s. In adition, the EiA expects the US output to rebound in H2 2016 as new projects begin.
EiA raises its WTI forecast for 2015 to $55.35 from $54.32. However, Oil output to drop in June through early 2016. Finally, the agency says oil output more resilient to lower prices than expected.
Adam Button points out that "this is about as bearish as it gets and it highlights why the medium-term picture for oil is so negative." Button comments that he doesn't see "how prices can hold at these levels."
If the WTI consolidates below 60.00, it will find supports at 59.65 and 59.00. To the upside, resistances are at 60.00, 60.35 and 60.90.
US crude oil production at highs since 1970s
According to the EiA, US crude oil production hit about 9.6M barrels per day in May, its highest level since 1972. The all-time high of about 10M barrels per day was in the early 1970s. In adition, the EiA expects the US output to rebound in H2 2016 as new projects begin.
EiA raises its WTI forecast for 2015 to $55.35 from $54.32. However, Oil output to drop in June through early 2016. Finally, the agency says oil output more resilient to lower prices than expected.
Adam Button points out that "this is about as bearish as it gets and it highlights why the medium-term picture for oil is so negative." Button comments that he doesn't see "how prices can hold at these levels."
If the WTI consolidates below 60.00, it will find supports at 59.65 and 59.00. To the upside, resistances are at 60.00, 60.35 and 60.90.