WTI Crude oil is currently trading near $65.41 per barrel which is sharply higher from yesterday low of $63.68; prices are trading higher on dollar weakness and revised OPEC demand forecast.
However crude oil prices were under pressure on an easing of supply concerns after Colonial Pipeline said late Monday that it plans to reopen its shuttered pipeline by the end of this week gasoline prices soared to a 3-year high early Monday due to supply concerns after the Colonial Pipeline was shut down late last Friday. The pipeline from Texas to the Northeast carries 2.5 million BPD of fuel or 45% of gasoline, diesel, and jet fuel consumed by the East Coast.
Meanwhile, OPEC raised the 2021 demand estimate for its crude oil. In a monthly report, the Organization of the Petroleum Exporting Countries said demand will rise by 5.95 million barrels per day (BPD) this year, or 6.6%. The forecast was unchanged from last month. OPEC now sees 2021 world economic growth at 5.5%, up from 5.4% last month, assuming the impact of the pandemic will have been "largely contained" by the beginning of the second half.
Positive economic data is supportive for crude oil prices. US March JOLTS job openings data is showing a stronger labour market, similarly, positive data from Germany and Japan have indicted a strong recovery in growth.
However crude oil is negatively affected as China's Customs General Administration reported last Friday that China April crude imports fell -18% m/m to 40.36 MMT, the lowest level since December. Also, fuel demand in India has plunged as the recent surge in new Covid infections, India gasoline sales in April fell to 2.14 MMT, the lowest in 8 months.
API reported late Tuesday afternoon that US crude supplies fell -2.53 million bbl and gasoline stockpiles rose +5.64 million bbl last week. However official US inventory data will be released later today to provide fresh direction to the oil market. It is expected that EIA crude inventories may fall by -2.0 million bbl.
Last Wednesday's weekly EIA data showed that US crude oil inventories as of Apr. 30 were -1.7% below the seasonal 5-year average, gasoline inventories were -1.9% below the 5-year average, and distillate inventories were -2.5% below the 5-year average.
Baker Hughes reported last Friday that active U.S. oil rigs rose by +2 rigs in the week ended May 7, rigmcount number is indicative of oil production in the US.
Crude oil prices are likely to trade firm while above the key support level of 20 days EMA of $63.78 per barrel and 50 days EMA of $61.94 per barrel. Meanwhile, it may face stiff resistance around $67.78 per barrel.