- Black gold jumped to multi-week highs yesterday, possibly due to bullish EIA report.
- Record US oil output could limit upside in the near-term.
Oil is solidly bid for a third day, having clocked 10-week highs yesterday.
WTI oil is currently trading 0.78 percent higher on the day at $54.60 per barrel. Meanwhile, brent is changing hands at $62.09.
Both benchmarks picked up a strong bid yesterday, with WTI rising to $54.90 - a level last seen on Nov. 21 - after the EIA reported that US imports from Saudi Arabia fell by more than half from the previous week to 442,000 barrels per day (bpd).
That was also the second lowest level in weekly data going back to 2010, ANZ bank said, according to a Reuters report.
Bullish pressures were also accentuated by the fact that the weekly US oil inventory build was much lower than expected. The American Petroleum Institute, an industry group, had predicted a 2.1-million-barrel build. The inventories, however, increased by 919,000 barrels.
Add to that, the Fed's dovish turn and the USD sell-off, and the path of least resistance appears to be on the higher side.
Even so, caution is still the name of the game, as record oil US oil output will likely keep the market oversupplied in the near-term. US crude oil production jumped by more than 2 million bpd last year to a record 11.9 million bpd, according to Reuters.
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