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WTI Crude Oil Holds The Line At $52.00

Shain Vernierโ€ขFriday, January 29, 2021โ€ข2 min read

Compared to the action in U.S. stocks, WTI crude oil is sluggish. Prices of WTI crude futures have been stuck in consolidation, currently just above $52.00. Intraday traded volumes are strong, with more than 325,000 contracts changing hands. At this point, it appears that the weekly oil inventory cycle has energy players reevaluating the situation.

This Weekโ€™s Crude Oil News

For the first time in 2021, we saw a major decline in the U.S. oil supply. If you missed them, here are the key stats from earlier in the week:

Eventย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  Actualย  ย  ย  ย  ย  ย  ย  ย Projectedย  ย  ย  ย  ย  ย Previous

API Stocks Reportย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  -5.272Mย  ย  ย  ย  ย  ย  ย  ย  603Kย  ย  ย  ย  ย  ย  ย  ย  ย  2.562Mย ย ย ย ย ย 

EIA Stocks Reportย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  ย  -9.910Mย  ย  ย  ย  ย  ย  ย  ย  430Kย  ย  ย  ย  ย  ย  ย  ย  ย  4.351M

Supplies-on-hand were down big week-over-week. Wednesdayโ€™s EIA number fell by nearly 10 million barrels, the largest drawdown since July of 2020. The culprit behind the lagging supplies was a significant drop in oil imports.

About an hour ago, the Baker-Hughes U.S. Oil Rig Count was released to the public. The figure came in at 295, up six rigs from last Fridayโ€™s 289. This will be an interesting number to watch as the Biden energy policies take hold. Given the new executive orders limiting drilling and permits on federal lands, the U.S. rig count may soon encounter a ceiling.

WTI Holds The Line At $52.00

The chart below is a look at 2021 March WTI crude oil futures within 2020โ€™s context. As you can see, prices are in a position to run at Last Februaryโ€™s highs.

March WTI Crude Oil Futures (CL), Weekly Chart
March WTI Crude Oil Futures (CL), Weekly Chart

Overview: Itโ€™s no secret that the new Biden administration is focused upon putting the clamps on U.S. crude oil production. If successful, this will mean a greater emphasis being placed on imports to sustain demand. When coupled with a devalued USD, it appears as though itโ€™s only a matter of time before WTI tests 2020โ€™s high and the $60.00 handle.

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ABOUT THE AUTHOR See More
Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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