WTI Oil has slipped back below $60 to $59.34. The key factors to keep in mind in this situation are the strong correlation between falling US oil rigs and reduced trade surpluses in the weekly inventory reports.
After appreciating by over $2 and rising back above $60 following another reduced trade surplus being learnt from the US weekly inventory reports, WTI Oil has slipped back below $60 to $59.34.
While we are now noticing a strong correlation between declining US oil rigs and reduced trade surpluses in the weekly inventory reports, the oversupply in the markets is still too high with this preventing the bulls from pushing the price of WTI any higher.
I personally believe that the price of WTI is stabilizing between $58 and $62 in the near-term, and I am also keeping an eye on investment in oil production increasing in the Middle East.
The news around investment in oil production increasing in the Middle East is an interesting one, mainly because it could be seen as an attempt from OPEC to regain market share and keep the price of WTI lower for longer.
The price of WTI being kept lower from longer would also squeeze out US oil producers, which would also reduce these constant concerns about there being an oversupply in the markets.