WTI Crude oil is lingering around $41 per barrel in Asia, down marginally on the day as three week high levels around $41.30 per barrel triggered selling pressure in the commodity. The US Energy Information Administration or EIA noted that its October Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty because mitigation and reopening efforts related to COVID-19 continue to evolve. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply patterns in 2020 and will continue to affect these patterns in the future.
EIA expects inventory draws in the fourth quarter to be 3.0 million b/d before markets become more balanced, with inventory draws of 0.3 million b/d on average in 2021. Despite expected inventory draws in the coming months, EIA expects high inventory levels and surplus crude oil production capacity will limit upward pressure on oil prices. EIA forecasts monthly Brent spot prices will average $42/b during the fourth quarter of 2020 and will rise to an average of $47/b in 2021.
Oil prices eased a few cents early in trading on Friday in a breather at the end of a week of big gains propelled by a strike in Norway that raised the prospect of supply from the major producer being slashed by up to 25%. Both contracts are on track for gains of around 10% this week – the first rise in three weeks – yanked higher by the prospect of tighter supply on production outages in the North Sea because of the action by Norwegian oil workers. Norwegian oil company and labour officials said they will meet with a state-appointed mediator on Friday in an attempt both sides hope will bring an end to a strike that threatens to strip out about a quarter of the country’s oil and gas output. Elsewhere, market watchers are also bracing for the impact on U.S. production of Hurricane Delta, forecast to strike the Gulf Coast within hours. Nearly 1.5 million barrels of daily output has been halted so far.
TREND : SIDEWAYS
Time : 09/10/2020
Pivot : 40.81
Technical View : LONG ABOVE 41.01
Target : 41.21, 41.85, 42.41, 43.31
Technical View : SHORT BELOW 40.61
Target : 40.41, 39.99, 39.19, 38.53