Crude oil posted its biggest daily fall after 4 October 2023. Prices dropped over 6% yesterday, and touched their lowest in four months. Oil prices came under pressure as weak data from the U.S. and Asia.
Anticipated an economic concern and worried about global oil demand.
MCX Crude futures down 6.20% and settled at 6026. Brent futures were down 4.40% at $77.44 a barrel U.S. West Texas Intermediate crude (WTI) was down by 4.78% at $4.78. Both indices have lost around a sixth of their value over the last four weeks.
OPEC and the International Energy Agency (IEA) have both predicted supply tightness in the fourth quarter, but some key economic data from around the world this week showed demand was bleaker than forecast.
Crude oil declines this week were mainly triggered by a steep rise in U.S. crude inventories and production sustaining at record levels, which analysts say triggered concerns of weak demand in the world’s largest oil consumer amid high output.
U.S. crude stocks rose by 3.6 million barrels last week to 421.9 million barrels, according to the U.S. Energy Information Administration (EIA), far exceeding analysts’ expectations in a Reuters poll for a 1.8 million-barrel rise. [EIA/S].
Technical Outlook – Crude Oil
Crude oil posted its biggest intraday drop yesterday. Prices touched lowest levels that were seen in July 2023 and settled with a loss of 6.20%. Today, it traded at 6122, up 1.61%.
As per the outlook given on 8 November 2023 has proven accurate. Prices dropped below our predicted target 6280-6200. Yesterday prices dropped to four months low of 6000.
On the above chart, prices found support 6020-6000 and traded at 6120 levels. Hence, prices may be consolidated for a short time. However, any short time upside moves towards 6250-6350 could attract selling pressure as a long bearish candlestick is still indicating a bearish momentum in near future.
Alternatively, on the upside, a break above 6395 only could change the sentiment and prices will recover towards 6580-6620.
Commodity Samachar
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