Oil prices held all their gains at the start of Thursday’s trading session. Oil traders are staying long amid reports showing supporters of President Trump storming the US Capitol.
What you should know
At the time of drafting this report, Brent crude was up 0.70% to trade at $54.68 a barrel after gaining 1.3% on Wednesday and U.S. West Texas Intermediate (WTI) was also up by 0.79% to trade at $51.03 a barrel.
- The U.S based oil contract rose 1.4% on Wednesday.
- Trump supporters stormed the U.S. Capitol yesterday, sending it into a shutdown, as Vice President Mike Pence refused a demand from President Trump to cancel his election loss to Joe Biden, before police kept the situation under control.
What they are saying
Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on the prevailing fundamentals keeping oil prices above $50 per barrel.
- “Oil is still holding up well supported by the anticipated Blue Wave stimulus effects and the surprising announcement by Saudi Arabia of a voluntary one-million-barrel production cut for February and March, even though the not-too-rosy DOE builds in both gasoline and distillates more than negated the draw in oil. Gasoline and jet fuel remain the main drag on the demand recovery. US crude inventories fell by a whopping 8.0mb w/w. Strong crude exports of 3.6mbd resulted in low net imports overall, well actually shocking enough oil exports from Saudi Arabia plunged to zero for the first time.”
Oil traders might be a little fretful about chasing the move above WTI at $51, with COVID-19 cases re-emerging in some provinces of China and the possible ramp-up of US oil prices.