On Thursday, oil closed higher as the reported stockpiles rose less than expected. That is because analysts were expecting a significant rise in supply. With stockpiles coming in lower it gave a bullish outlook for the price of oil. The compliance from OPEC and non-OPEC nations cutting oil output is still having a positive effect on the market. The problem is that oil has been stuck trading in a certain range. The worry is that even though OPEC has done much to cut output, oil prices are still not surging higher as expected. What may derail the oil trade is the fact that U.S. oil exports have surged higher in the face of OPEC cuts.

Stockpiles Down

The Energy Information Administration — EIA — reported that U.S. crude stockpiles rose by 564,000 barrels in the week ending February 17. This was good news, because there was an expectation that there would be a build of 3.5 million barrels. This was good news because the build in stockpiles rose less than expected. A problem with this data though is that this was the seventh consecutive build in barrels. In order for the price of oil to head higher, there needs to be a report that shows a drop in barrels of oil being produced. Overall, the report was bullish which is what helped drive the price of oil higher for the day. WTI crude oil closed higher by 1.6% to $55.45 a barrel, and Brent Crude closed higher by 1.3% to $56.55 a barrel.

OPEC Effect Continues

A few months back OPEC and non-OPEC nations agreed to curb oil output by as much as 1.8 million barrels per day. This was done in an attempt to drive oil prices higher. Well on Thursday a new report came out stating that both OPEC and non-OPEC nations are nearly on track with respect to their output cut levels. On the OPEC side of things it is stating that it has reached 90% compliance with the stated output cuts. Non-OPEC nations have been able to achieve up to 70% compliance with their cuts. There is still a lot of work that all these nations must do, but the market likes the fact that it has been able to at least establish a deal. In the coming months the compliance in output cuts must go higher or else global stockpiles will start to build up again. That will be detrimental for the price of oil which has been struggling to break its trading range. Oil has been stuck in a range between $50 a barrel to $54 a barrel. Such a range won’t be broken until oil output compliance is completely done.

Export Record

Oil has not been able to trade higher even with the output cuts by OPEC. The reason being is that there is still worry about excess supply in the global market. This concern was further strengthened with a new report from the EIA. The EIA reported that the U.S. exported 1.2 million barrels of oil into the global market last week. The problem with that is that the amount of oil being exported from the U.S. has jumped substantially. Just a few weeks ago the U.S. was only exporting around 500,000 barrels per day to the global market. That means that the U..S. is almost countering what the OPEC deal set out to establish with cuts.

What Binary Options Traders Should Watch For

There are a few key things that traders need to look for to determine where the price of oil will head to next. For Starters, the weekly EIA inventory report is an important metric to watch. It indicates how much inventory of oil the U.S. has in its coffers. It also indicates whether or not demand it picking up pace. The next weekly inventory report is set to come out this Thursday. Traders must also be on the lookout for OPEC compliance. If OPEC fails to stick to its agreement on the output cut goal, then the price of oil can fall real fast. Finally, the fact that the U.S. has picked up the pace in exporting activity of oil should be concerning. That is because the amount of oil being exported from the U.S. has doubled. That is a huge concern, because it could drive the price of oil lower.