US crude is almost unchanged in the Wednesday session. In the North American session, US crude futures are trading at $53.21. Brent crude futures are trading at $55.35, as the Brent premium stands to $3.14. On the release front, Crude Inventories posted a surplus of 2.8 million, well above the forecast of 1.5 million. On Thursday, the US publishes two key events – Unemployment Claims and New Home Sales.
OPEC and other major producers have cut oil production in an attempt to raise prices, but their efforts could be derailed as US oil production is on the increase. Crude stockpiles rose in the US for a third consecutive week, as more US shale producers have commenced operations in as oil prices remain above the $50 level. On Sunday, OPEC announced that 1.5 million barrels had been taken out of the market, out of 1.8 million agreed to under the recent production agreement between OPEC and other oil exporters. Still, if US production continues to rise and offsets the cutbacks announced by OPEC, oil prices could head lower.
Donald Trump has just started his new job, but he has wasted no time in advancing a protectionist stance. On Monday, President Trump signed an executive order formally withdrawing the US from the Trans-Pacific Partnership, a broad trade agreement which the US had signed but not ratified. Trump had promised to leave the TPP during the election, arguing that the deal would hurt American workers. Next stop is NAFTA, which Trump has said he will renegotiate with Canada and Mexico. Trump has taken a tough line on US companies that have moved production outside of the US and has threatened to impose tariffs on companies that move production to Mexico. Predictably, these protectionist measures are raising concerns in the markets that US economic growth could drop if the US takes an isolationist stance towards global trade, and such a stance would likely weigh on the US dollar. If America’s trade partners choose to retaliate against Trump’s moves, this could lead to a trade war in which there are no winners.
Wednesday (January 25)
- 9:00 US HPI. Estimate 0.4%. Actual 0.5%
- 10:30 US Crude Oil Inventories. Estimate 1.5M. Actual 2.8M
Upcoming Key Releases
Thursday (January 26)
- 8:30 US Unemployment Claims. Estimate 247K
- 10:00 US New Home Sales. Estimate 585K
*All release times are GMT
*Key events are in bold
WTI/USD for Wednesday, January 25, 2017
WTI/USD January 25 at 12:30 EST
Open: 53.00 High: 53.47 Low: 52.56 Close: 53.21
WTI USD Technical
WTI/USD was flat in the Asian session. The pair posted slight losses in European trade but has rebounded with gains in the North American session
- 52.22 is a weak support line
- 58.32 is the next resistance line
- Current range: 52.22 to 58.32
Further levels in both directions:
- Below: 52.22, 46.54, 40.57 and 33.22
- Above: 58.32, 65.05 and 72.99
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.