WTI crude oil settles nearly $1 higher as weekly inventory data shows tightness

WTI crude oil settled 98-cents higher today to $70.43.

Oil traded up to $88 early last year but has been treading water near $70 for months. The opening level of the year was $71.65 so it’s on track for a small decline this year.

Today’s EIA US oil inventory data:

• Crude -4237K vs -1867K expected
• Gasoline +1630K vs -1080K expected
• Distillates -1694 vs -313K expected
• Refinery utilization +0.7% vs -0.4% expected

Global inventories are tighter than some of the commentary suggests but OPEC+ is holding back plenty of spare capacity. A key question early next year surrounds US policy towards Iran and whether Trump will try to eliminate Iranian barrels from the global market. China is the main buyer at the moment so that may prove to be a tall task.

Technically, it’s a waiting game to see if $65 holds but if it can through the next few months the spring seasonal tailwinds should help.

This article was written by Adam Button at www.forexlive.com.