WTI renews multi-month highs above $61 after EIA data shows decline in US oil stocks
- Crude oil stocks in US fell by 1.1 million barrels.
- JP Morgan revised WTI price forecast for 2020.
- OPEC+ output cut and easing geopolitical tensions continue to support prices.
Crude oil prices rose for the fifth straight day on Wednesday and the barrel of West Texas Intermediate reached its highest level in three months at $61.17. As of writing, the WTI was up 1% on the day at $61.10.
EIA data boosts WTI
The weekly report published by the US Energy Information Administration (EIA) on Wednesday revealed that crude oil stocks in the US declined by 1.1 million barrels in the week ending December 13th to 446.8 million barrels. Although this reading came in slightly lower than the market expectation for a draw of 1.3 million barrels, the WTI gathered bullish momentum.
The ongoing crude oil rally is fueled by the inspiring Industrial Production data from both China and the US, easing geopolitical tensions following the completion of the phase-one trade deal and OPEC+' introduction of additional output cuts.
Amid these changes in market dynamics, JP Morgan said it revised the average price forecast for WTI in 2020 to $60 from $57.50. "We continue to expect global oil demand growth at 1 million barrels per day," JP Morgan said. "The OPEC, Russia and other producers, a group known as OPEC+, have agreed to cut output by an extra 500,000 barrels a day in the first quarter of 2020.”
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
