FXStreet reports that Bart Melek, Head of Commodity Strategy at TD Securities, said that OPEC supply is offsetting the positive impact of inventory declines as demand worries linger.

“Following an upbeat week, crude oil stocks again added a positive tone as crude oil inventories dropped another unexpectedly large 3.88 million bbls vs a predicted 2.1 million decline. Adding to this positive is the unexpectedly large 7.2 million bbl distillate stocks decline and the 1.6 million bbl gasoline inventory drop.”

“With the US no longer pursuing a new fiscal stimulus plan which has any chance to be ready before the election, the second wave of COVID-19 is once again reducing economic activity and oil consumption projections. As such, significant crude oil upside is not expected for now.” 

“I suspect that WTI will have a hard time to move much above resistance near $41/bbl, at least in the near-term. And, there is a risk that election-related uncertainty may send it even lower to support just under $36/bbl.”