After Trump interrupted the oil market rally, Brent crude struggles to regain the upside momentum as traders continue to digest the message from the US leader. The futures have recovered by 1% yesterday and trade almost unchanged on Wednesday, trying to find further direction.
The API report was fairly bullish, with crude oil stockpiles unexpectedly fell by 4.2 million barrels. Moreover, gasoline stockpiles declined by 3.8 million barrels. However, market reaction to the release was short-lived as investors are waiting for the official data from the EIA to confirm the decline in stockpiles.
Meanwhile, OPEC has indicated it will continue to withhold supply despite pressure from U.S. President Donald Trump. Saudi oil minister Khalid Al-Falih said there is likelihood of output cuts extension. He pointed to the need to continue to moderate oil production in the second half of 2019 and noted that oil market is responding to output cuts.
So far, traders are apathetic to the positive signals and comments in the industry, but as soon as the market digests Trump’s message, Brent could resume the ascent assuming that the risk-on sentiment will prevail in the global financial markets.