WTI defends $78.00 as OPEC cites SPR blowing global oil supplies

• WTI picks up bids to reverse the pullback from weekly top.
• OPEC panel anticipates 1.1 mbd excess supplies due to SPR.
• Asia follows the US-led release of strategic oil reserves, EIA stockpiles increase.
• Off in US, the light calendar will restrict intraday moves.

WTI prints mild gains above $78.00, near $78.20 during Thursday’s Asian session on the hawkish hopes from the Organization of the Petroleum Exporting Countries (OPEC).

The black gold took a U-turn from the weekly high to snap a two-day uptrend the previous day after supply concerns escalated. Also adding to the upside filter was the weekly official oil inventories from the US Energy Information Administration (EIA). It should be noted that the EIA Crude Oil Stocks Change rose to +1.017M versus -0.481M forecasts and -2.101M prior.

That said, Bloomberg came out with the OPEC panel forecasts while saying, “SPR (Strategic Petroleum Reserves) releases may massively swell global oil surplus. The news adds, “Oil excess in world markets may increase by 1.1 million barrels a day (MBD) in January and February.”

Given the OPEC’s fear of supply increase and a resultant price decline, chatters are loud that the cartel will cut the output goals and help the oil prices.

Even so, fears of the Fed rate hike and fresh covid woes from the Eurozone challenge the oil buyers.

To sum up, the oil prices are likely to stay sidelined with mixed catalysts. Adding to the indecision the Thanksgiving Day Holiday in the US and a light calendar elsewhere.

Technical analysis

Wednesday’s bearish spinning top teases WTI sellers but a 50-day EMA level of $78.00 restricts short-term moves, a break of which will direct oil sellers to a 100-day EMA level of 74.90.