Prices Stabilise, Fundamentals Positive

Oil prices eased on Wednesday after two days of gains following OPEC’s output cut decision. WTI fell 0.3% to $80.47/bbl but Brent is stable at around $84.99. The USD index is 0.3% higher on safe haven buying.

• Oil traded in a narrow range with Brent reaching a high of $85.54 and a low of $84.01 and WTI a high of $81.24 and low of $79.72. Both remain above their 200-day moving averages. WTI resistance is at $81.01, the April 4 high, and support at $77.60, while Brent’s are at $86.44 and $82.57 respectively.
• The EIA reported that US crude inventories fell 3.74mn barrels in the latest week, despite an increase in imports, while gasoline fell 4.12mn and distillate 3.63mn. There was also a 400k draw from the SPR, which is now at a new 40-year low. This was the first reduction since January. Refinery utilisation was down 0.7%. In addition, US gasoline demand is higher than usual for the time of year. Product supplied is up 15% in the last 10 weeks.
• Bloomberg reported that Saudi Arabia has increased its prices for all sales to Asia in May.