Crude Continues Declining Following OPEC Decision

Oil prices fell further on Tuesday and are now around 5% lower than before the weekend’s OPEC meeting and decision to reduce output cuts from October. Non-OPEC supply was already expected to be robust. Prices took another step down following industry data showing a large US stock build.

• WTI fell 1.8% to $72.92/bbl to be down 5.3% this week. It fell to a low of $72.48 before recovering somewhat but then declined again following the US inventory data. It has started today’s APAC trading around $72.94. This week’s move lower has reinforced the bearish theme with support at $73.24 broken yesterday opening up $71.33, February 5 low. Initial resistance is at $76.15.
• Brent is down 1.6% to $77.13/bbl to be 4.9% lower since the OPEC decision. It reached a low of $76.76 before recovering to $77.89. It is now trading below support at $77.41 opening up $75.63. Initial resistance is at $80.44.
• Bloomberg reported a 4.1mn barrels crude inventory build in the US compared with a 6.5mn drawdown the previous week according to people familiar with the API data. Gasoline rose 4.0mn barrels and distillate 2mn. The official EIA data is released later today.
• CIBC noted that WTI reached oversold levels according to the relative strength index, according to Bloomberg.