West Texas Crude Hits 3-Week High as OPEC Looks to Extend Production Cuts

West Texas crude has moved higher for a third straight day, punching past the symbolic $50 level for the first time since March 9. In Thursday’s North American session, WTI crude futures are trading at $50.38. Brent Crude futures have climbed to $52.98, as the Brent premium has narrowed to $2.60. On the release front, US Final GDP posted a gain of 2.1%, edging above the estimate of 2.0%. Unemployment claims jumped to 258 thousand, well above the forecast of 244 thousand. On Friday, we’ll get a look at consumer confidence levels, with the release of UoM Consumer Sentiment.

Crude oil has strengthened this week, but prices are still down sharply in March. The markets remained concerned about a global oil glut, as increasing US production has offset OPEC production cuts. US Crude Inventories continue to show surpluses, most of which have been higher than the forecast. Although another surplus was recorded last week, the reading of 0.9 million was slightly smaller than the estimate of 1.2 million. Still, total US crude inventories have reached an all-time high of 534.0 million barrels, so oil prices may have trouble staying above the $50 level. OPEC has hinted that it may extend its production cut deal past June for another six months. So far, OPEC has come up empty-handed, as oil prices have slipped since the agreement took effect on January 1.

It’s been a rough-and-tumble start for the Trump administration, which has been beset by controversy and crises since Trump assumed office in January. Trump has yet to provide any details of an economic policy, to the consternation of the markets. Last week, Trump’s proposed healthcare bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration’s links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

WTI/USD Fundamentals

Thursday (March 30)

• 8:30 US Final GDP. Estimate 2.0%. Actual 2.1%
• 8:30 US Unemployment Claims. Estimate 244K. Actual 258K
• 8:30 US Final GDP Price Index. Estimate 2.0%. Actual 2.1%
• 10:30 US Natural Gas Storage. Estimate -37B. Actual -43B
• 11:00 US FOMC Member Robert Kaplan Speech
• 23:01 British GfK Consumer Confidence. Estimate -7

Upcoming Key Events

Friday (March 31)

• 10:00 US Revised UoM Consumer Sentiment. Estimate 97.8

*All release times are GMT

*Key events are in bold

WTI/USD for Thursday, March 30, 2017

WTI/USD March 30 at 12:55 EST

Open: 49.60 High: 50.46 Low: 49.27 Close: 50.22

WTI USD Technical

WTI/USD showed little movement in the Asian and European sessions. The pair has posted gains in North American trade

• 46.54 is providing support
• 52.22 has weakened in resistance
• Current range: 46.54 to 52.22

Further levels in both directions:

• Below: 46.54, 40.57 and 33.22
• Above: 52.22, 58.32, 65.05 and 72.99

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