Oil Remains Bid after Inventories Post Small Decline

Fundamental analysis of Forex market

Oil prices climbed higher after the weekly DOE crude inventories fell by 46,000 barrels last week, the market consensus was for a decline of 2.5 million barrels. The reason oil prices edged higher on a smaller draw, was because yesterday, the weekly API oil inventories rose by 6.9 million barrels, up from a build of 3.5 million in the prior month.

The weekly Baker Hughes US rig count rose from 1,080 to 1,083. The US oil rig count also increased from 883 to 885. The gas rig count also ticked higher from 197 to 198.

The Canadian dollar still remains near its 19-month lows against the greenback and has yet to show a significant recovery along with oil prices.

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Price action on the West Texas Intermediate (WTI) crude daily chart shows key low of $42.36 is still holding and price is in the middle of this week’s trading range. Volumes remain light and it is become less likely a major move will occur until the New Year. The $40 level remains critical support for WTI and it could happen if we see another major wave of risk aversion. To the upside, $48.00 could provide initial resistance.