Yahoo Finance Crude Oil Price Analysis for January 1, 2017
Crude oil topped at 60.42, posting a fresh 2.5 year high in the process. Further dollar weakening and an EIA report on Thursday, which indicated a surprise dip in U.S. production have provides support into year end. In addition, pipeline outages in the North Sea and Libya have put a floor under West Texas Intermediate. Strong refinery runs continues to drive demand for crude oil along with colder than normal weather which is driving heating oil prices.
Technicals
Crude oil broke out hitting a fresh 2.5-year high, and is poised to test target resistance near the May 2015 highs at 62.58. Support on crude oil is seen near the 10-day moving average at 58.67. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (9-day moving average of the MACD line).
Refiners are Running on all Cylinders
The EIA reported that U.S. crude oil refinery inputs averaged 17.4 million barrels per day during the week ending December 22, 2017, 335,000 barrels per day more than the previous week’s average. Refineries operated at 95.7% of their operable capacity last week. Distillate fuel production increased last week, averaging 5.5 million barrels per day.
Imports have Slowed
Over the last month, crude oil imports averaged 7.6 million barrels per day, 5.9% less than the same month last year. Total motor gasoline imports last week averaged 388,000 barrels per day. Distillate fuel imports averaged 239,000 barrels per day last week.
Inventories Dropped
The increase in runs and the lack of imports lead to a draw in crude oil inventories. The EIA reported that U.S. commercial crude oil inventories decreased by 4.6 million barrels from the previous week. Gasoline inventories increased by 0.6 million barrels last week while distillate fuel inventories increased by 1.1 million barrels last week and are in the middle of the average range for this time of year. Total commercial petroleum inventories decreased by 8.8 million barrels last week.
Demand Remains Strong
Total products demand over the last four-week period averaged 20.6 million barrels per day, up by 3.5% from the same period last year. Over the last four weeks, gasoline demand averaged over 9.2 million barrels per day, up by 2.0% from the same period last year. Distillate fuel demand averaged 4.1 million barrels per day over the last four weeks, up by 0.7% from the same period last year.
This article was originally posted on FX Empire
