WTI crude oil futures settle at $53.55

Daniel Fowler
February 2, 2021

We expect crude oil prices to trade sideways to up with support at $53 and resistance at $56.

United States crude yesterday rose 0.2% yesterday, while Brent crude futures fell 0.6% and posted the third straight daily loss.

Crude ETFs gained amid the news as well with the United States Oil Fund (USO) adding 2.64%, while the ProShares Ultra Bloomberg Crude Oil (UCO) gained more than 5.2%.

There are pockets of physical-market strength, too. Royal Dutch Shell Plc, meanwhile, raided the North Sea physical market, buying the most benchmark-grade cargoes in a single day in 10 years in the S&P Global Platts pricing window.

Alongside that move, the structure of the futures curve has been firming, adding to the bullish outlook. While supply is still tight at the start of 2021, the bank sees all that changing by August of this year.

Oil prices rose more than 2pc on Monday, buoyed by falling U.S. crude inventories and rising winter fuel demand as a one of the worst snowstorms in years hits the U.S. Northeast. Crude prices tend to move inversely to the US currency.

Europol Warning: Illicit sale of false, negative COVID-19 Test Certificates
The single-use kit analyzes a sample collected by the user and delivers the results to a smartphone within 15 minutes. The US now has more than 26.2 million cases of Covid-19, according to Johns Hopkins University data.

The oil market is "supported by the combination of tightening fundamentals, as seen through the rising backwardation and the renewed risk appetite in the USA stock market", said Ole Hansen, head of commodities research at Saxo Bank A/S.

BP Plc offered more evidence that Big Oil has barely begun to heal the wounds from last year's slump, posting earnings that missed expectations mainly due to weak fuel sales and refining margins. "United States supply will also start to turn higher by mid-2021, after facing declines through H2 2020 and H1 2021", Kim noted.

The Organisation of Petroleum Exporting Countries (OPEC's) crude oil production increased by 160,000 barrels per day (bpd) in January as the non-member countries called OPEC+ alliance is easing the output cuts in the first month of the year, it was gathered at the weekend.

The total operating rigs rose to 295, the highest level since the week ending May 1, 2020.

In the futures market, crude oil for February delivery touched an intraday high of Rs 3,992 and an intraday low of Rs 3,944 per barrel on MCX.

Other reports by

Discuss This Article