Yahoo Finance Crude Oil Rebounds from Support Ahead of EIA Data
Crude is trading at 66.50 following the close, after topping at 66.75 during the London session. Earlier, modest dollar gains weighed on the contract, though the easing of Mid-east tensions following the allied Syria raid over the weekend has been the main driver. Focus will remain on geopolitics however, with talk of fresh U.S. sanctions on Iran and Russia likely to limit oil’s downside potential. EIA forecasts that production rose in March in its Short-term Energy Outlook.
Technicals
Crude oil prices rebounded from session lows, closing up on the day following a test of support near the 10-day moving average at 65.19. Resistance is seen near the April highs at 67.77. Positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the black with a declining trajectory which reflects consolidation. The fast stochastic whipsawed but generated a crossover buy signal which points to higher prices.
U.S. is Increasing Production
EIA estimates that U.S. crude oil production averaged 10.4 million barrels per day in March, up 260,000 barrels a day from the February level. Total U.S. crude oil production averaged 9.3 million barrels per day in 2017. EIA projects that U.S. crude oil production will average 10.7 million barrels per day in 2018, which would mark the highest annual average U.S. crude oil production level, surpassing the previous record of 9.6 million barrels per day set in 1970. EIA forecasts that 2019 crude oil production will again increase, averaging 11.4 million barrels per day.
For the 2018 U.S. summer driving season, EIA forecasts U.S. regular gasoline retail prices to average $2.74/gallon up from an average of $2.41 last summer. The higher forecast gasoline prices are primarily the result of higher forecast crude oil prices. For all of 2018, EIA expects U.S. regular gasoline retail prices to average $2.64/gal and gasoline retail prices for all grades to average $2.76/gal, which would result in the average U.S. household spending about $190 more on motor fuel in 2018 compared with 2017.
Canada manufacturing shipment values rebounded
Canada manufacturing shipment values rebounded 1.9% in February following a revised 1.3% drop in January. The pick-up outpaced expectations, but is not shocking given the anticipated resumption in vehicle sector sales. Indeed, a 6.6% surge in transportation equipment sales drove the bounce in total manufacturing shipment values in February after leading total shipments lower in January. Motor vehicle sales and motor vehicle parts rebounded following the declines in January that were due to atypical plant shutdowns in January, according to Statistics Canada. Gains were evident in other sectors. Primary metals were up 4.8% after suffering back to back declines. Paper manufacturing grew 3.2% and electronic products expanded 5.7%, with both seeing declines in January. A 2.1% drop in petroleum and coal products provided a partial offset, although a contraction in prices was the main factor, with sales volumes for the sector down only 0.7%. Total manufacturing shipment volumes grew 2.0% in February, supportive of our expectations for a 0.1% resumption in February GDP growth after the 0.1% GDP decline in January.
This article was originally posted on FX Empire
