Oil prices have updated its next annual highs after the publication of a report from the Energy Information Administration of the US Department of Energy, showing a reduction in inventories.

A breakthrough of the upper limit and annual highs led to the formation of a new trend movement, which opens up a good potential for a return in the region of $ 77 per barrel by the WTI brand. Maintaining the sufficiently high geopolitical risks and the escalation of conflict in the Middle East further pushes the oil quotes upwards while keeping a high demand.

The initial target of oil buyers will be the level around $ 73 per barrel, an area where long positions can be fixed with larger profits but it is necessary to get beyond the resistance of $ 69 per barrel in the near future.

As mentioned above, the data from the Energy Information Administration of the US Department of Energy led to an increase in oil demand. However, oil inventories fell by 1.1 million barrels to 427.6 million barrels during the reporting period. Economists had expected that the stock reduction would reach 200,000 barrels.

Gasoline stocks also declined by 3 million barrels to 236 million barrels, while analysts expect a decrease by 900,000 barrels only. Distillate stocks fell by 3.1 million barrels to 125.3 million barrels. On one hand, Economists predicted a reduction in stocks by 500,000 barrels.

Also, the total utilization of oil refining capacity had dropped to 92.4%, while analysts, on the contrary, expected index growth by 0.1%.

The Canadian dollar paired with the US dollar weakened after the decision made by the Bank of Canada on Thursday.

As it became known, the Canadian regulator kept the key rate of interest unchanged at the same level at 1.25%. In many other countries, the Bank of Canada is not satisfied with low inflation, which based on opinion, will only reach the 2% target level by the end of 2019.

The speech from the Governor of the Bank of Canada only increased the pressure on the Canadian dollar.

According to Stephen Poloz, the economy has a significant progress in the past 12 months and the economic slowdown in early 2018 was due to weakening exports and new rules for mortgage lending.

In his view, the interest rate can be increased over time and it will be necessary to do this as to maintain inflation at the target level. At the present time, the rates at the previous level attained an interesting position.

In terms of risks, the manager believes that trade conflicts and the increasing geopolitical risks will put pressure on rates in the future.

* The presented market analysis is informative and does not constitute a guide to the transaction.