U.S. West Texas Intermediate and international-benchmark Brent crude oil futures remained in the grip of bears last week as the addition of Mexico in tariff war was enough to turn the sight of market participants from tightening supply of OPEC club to increased risk of lower growth and demand. As per the Energy Information Administration (EIA) weekly inventories report, U.S. crude stocks fell by around 300,000 barrels during the week-ending May 24, to 476.49 million barrels. The greenback government reported that the production of black gold returned to a record 12.3 million barrels per day. The vowed of slapping 5% tariffs on all imports from Mexico has further added the downside risks and pressured the oil prices making it to low of $52.22 as we expected in our previous report http://www.advisorymandi.com/editors-pick/crude-oil-inventories-trading-map--1197. On June 4, 2019, Saudi Energy Minister Khalid al-Falih came forward and stated a consensus to continue upon sustaining market stability in the second half of the year. But the tariff escalation by U.S. President Donald Trump is expected to outperform the supply cuts from OPEC club.
API and Reuters Forecast:
As per the weekly American petroleum Institute (API) storage report an unexpected rose by 3.5 million barrels last week to 478 million is reported by them that might hammer more on black gold prices, while the analysts in a Reuters polls are expecting the stockpiles to shed more by 0.8 million barrels.
After incorporating the Three weeks and Five Weeks Exponential Time –Series Forecasting in the previous 11 weeks crude oil inventories data reported by Energy Information Administration, we are expecting that resulted stockpiles of crude oil could increase either by 3.283 million per barrels and 3.157 million per barrels respectively. In order to filter the time period, we have employed a Root Mean Square Error method (RMSE), which is pointing out for Five Weeks Exponential Time Series Forecast, according to which, the Crude Oil Inventories is expected to surge by 3.157 million per barrels making it a total stock piles of 479.64 million per barrel in reserves of U.S. government.
Weekly Technical Forecast
The crude oil prices edged a little higher after China’s urge of resolving trade disputes with greenback although the numbers from American petroleum institute are not favoring for buyers. For next week, we are not expecting any firecrackers as the counter has test 61.8% ratio as per Fibonacci analysis and expected to remain on tenterhooks. The black gold is continued to trade below 200 days Moving Average. Awesome oscillator and RSI have reached to its oversold zone.