WTI oil pulls back from eight-month highs above $46
- WTI prices rally 30% in November to reach levels past $46.
- EIA has reported an unexpected decline in US oil stockpiles.
Front-month WTI futures have traded higher for the sixth consecutive session on Wednesday, popping up to levels above $46 for the first time since early March, before pulling back to $45.75 area
Oil appreciates after EIA’s report
The US Energy Information Administration reported that US oil stockpiles declined by 754,000 barrels, against market expectations of a 127,000 increase. This news has sent the price of the West Texas Intermediate barrel to $46.25 highs, levels not seen since the first wave of the pandemic gripped global economy in March
Beyond that, oil prices have rallied nearly 30% in November, boosted by a combination of factors. First of all, the progress of the diverse COVID-19 vaccines that have reported test results this month has boosted expectations of a coronavirus cure available in the next months, easing concerns about the weak outlook for oil demand.
In the US, the market is anticipating a fiscal stimulus package by Biden’s administration and further monetary easing action by the Federal Reserve in order to shore up the US economy.
Finally, hopes that the OPEC+ will finally sign a deal to extend output cuts beyond January 2021 in a key oil producers’ meeting due on November 30, is contributing to the oil rally.
Technical levels to watch
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
