WTI/USD – US Crude Steady at $50, Crude Oil Inventories Next

US crude has ticked lower in the Tuesday session. In North American trade, WTI/USD futures are trading at $49.84 per barrel. Brent futures are trading at $51.38, as the Brent premium stands at $1.54. On the release front, US CPI edged upwards to 0.3%, matching the forecast. Core CPI dipped to 0.1%, shy of the forecast of 0.2%. On Wednesday, the US will release Crude Oil Inventories and Building Permits.

On Tuesday, US consumer inflation numbers were mixed. CPI edged up to 0.3%, up from 0.2% a month earlier. This was the strongest gain since April. Core CPI went the opposite direction, slipping to 0.1%, down from 0.3% a month earlier. These numbers could have an important bearing on the Fed’s interest rate decision in December. Currently, a December rate hike is currently priced in at 64 percent. Meanwhile, US consumer spending impressed in September. Retail sales gained 0.5%, while core retail sales jumped 0.6%, as both key indicators rebounded from declines in August. PPI was steady at 0.3%, but the UoM Consumer Sentiment Index disappointed, dropping to 87.9 points and missing expectations. This marked the weakest reading since September 2015.

US crude posted strong gains last week after Russian president Vladimir Putin stated that Russia would join the OPEC agreement to cap production levels. OPEC members surprised the markets in late September when they reached a tentative agreement to put a ceiling on production levels in order to stabilize oil prices. OPEC has called on other exporters to join the agreement, and having the backing of Russia could be an important step towards reaching a final agreement, slated for late November. At the same time, oil producers have not been able to bridge their differences in the past, notably Saudi Arabia and Iran, so there is certainly room for doubt that an agreement will actually be signed.

WTI/USD Fundamentals

Tuesday (October 18)

• 8:30 CPI. Estimate 0.3%. Actual 0.2%. Actual 0.3%
• 8:30 Core CPI. Estimate 0.2%. Actual 0.1%
• 10:00 NAHB Housing Market Index. Estimate 64 points
• 16:00 TIC Long-Term Purchases

Wednesday (October 19)

• 8:30 Building Permits. Estimate 1.17M
• 10:30 US Crude Oil Inventories. Estimate 2.4 million

*All release times are EDT

*Key events are in bold

WTI/USD for Tuesday, October 18, 2016

WTI/USD October 18 at 10:45 EDT

Open: 50.12 High: 50.53 Low: 49.77 Close: 49.83

WTI USD Technical

• WTI/USD was flat in the Asian session. The pair posted gains in the European session but has reversed directions in North American trade
• 46.69 is providing support
• There is weak resistance at 50.13

Further levels in both directions:

• Below: 46.69, 43.45 and 38.38
• Above: 50.13, 53.50, 59.69 and 65.49

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