According to Sushil Finance, expect crude oil prices to trade sideways on the back of profit booking after up move.
Sushil Finance's commodity report on crude oil
Oil prices rose 1.3 percent on Thursday after much stronger demand in China overshadowed a downbeat report by the International Energy Agency (IEA) that showed higher production by key OPEC exporters. Prices had responded only minimally to data Wednesday showing U.S. crude oil inventories dropped last week by the most in 10 months. Oil prices have dropped in recent weeks to levels not seen since the end of last year as investors lost faith in a deal between OPEC and non - OPEC produers to reduce output, while U.S. shale oil production has risen sharply. But there is evidence world oil demand is picking up, notably in the United States and China, the world's two biggest oil consumers. China imported 8.55 million barrels per day (bpd) of oil in the first half of this year, up 13.8 percent from the same period in 2016, making it the world's biggest crude importer ahead of the United States. Rising demand is helping to drain a global fuel glut but rebalancing of the market is taking longer than anticipated. The IEA said the oil market could stay oversupplied for longer than expected due to rising production and limited output cuts by some members of the Organization of the Petroleum Exporting Countries. Oil inventories in industrialised nations remain high despite a modest drop in May. OECD stocks are still 266 million barrels above the five - year average, the IEA said. OPEC said on Wednesday the world would need only 32.2 million bpd of its crude next year, down 60,000 bpd from this year and about 400,000 bpd less than it pumped in June.Outlook
We expect crude oil prices to trade sideways on the back of profit booking after up move.
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