Oil was down on Thursday morning in Asia, with investors digesting a small but surprising build in U.S. crude oil supplies that re-ignited fuel demand worries.
Brent Oil Futures were down 0.37% to $55.87 by 10:02 PM ET (3:02 AM GMT) and WTI Futures fell 0.34% to $53.13. The black liquid gave up some of the gains made during the past two days on hopes of massive COVID-19 stimulus measures under newly inaugurated U.S. President Joe Biden, but both Brent and WTI futures continued to stay firmly above the $50 mark.
COVID-19 restrictions on mobility were hurting the near-term outlook for oil demand, although investors had been looking beyond that on the hopes that vaccine rollouts would ease lockdowns, Axi’s Innes said.
“Simultaneously, the near-term China crude demand forecast looks high and susceptible to revision lower as lockdowns spread in the country ahead of the Lunar New Year,” the note added.
Meanwhile, Biden got straight to work after being inaugurated as the 46th U.S. president, and one of his first actions was to revoke a permit for the Keystone XL oil pipeline project from Canada, as well as announcing America’s return to the Paris climate accord.
Biden’s administration will also commit to ending new oil and gas leasing on federal lands, Biden press secretary Jen Psaki said, although a timeline for achieving that goal has yet to be laid out.
On the technical front, Brent Oil RSI stood at 64.782 the current price is trading Above All the Moving Averages. So, a Buy trade can be executed with the following target and stop-loss:
TRADE SIGNAL- Brent Oil – Buy: 55.70, TARGET:56.30 , STOP LOSS:55.40.