After yesterday’s crunch, Crude oil prices are trading in a small range. It dropped more than 2.2%, driven by fears that more aggressive U.S. interest rate hikes would hit demand, while the market awaited further clarity on inventories.
Brent crude futures climbed 11 cents, or 0.1%, to $83.40 per barrel. U.S. West Texas Intermediate (WTI) crude futures eased 9 cents, or 0.1%, to $77.49 a barrel, during early European trading sessions.
Both Brent and WTI fell by more than 3% on Tuesday after comments by U.S. Federal Reserve Chair Jerome Powell that the central bank would likely need to raise interest rates more than expected in response to recent strong data.
A stronger dollar also capped a lid on oil prices. Powell’s comments had propelled the U.S. dollar, which typically trades inversely with oil, to hit a three-month high against a basket of currencies.
Traders were also awaiting crude inventory data from the U.S. Energy Information Administration later on today, after the API data showed a decline in crude inventories for the first time after a 10-week build, she said.
Data from the American Petroleum Institute showed U.S. crude inventories fell by about 3.8 million barrels in the week ended March 3, according to market sources.
The drawdown defied forecasts for a 400,000 barrel rise in crude stocks from nine analysts polled by Reuters.
Meanwhile, gasoline inventories rose by about 1.8 million barrels, while distillate stocks rose by about 1.9 million barrels, according to the source
Crude oil prices retreated from the peak of 6 March 2023 and currently are trading at 6371 levels. The short term consolidation is giving a shape of symmetrical triangle pattern on the daily chart.
However, the pattern is not completed yet. It would need to break below 6220 for the confirmation of the downside break. Alternatively, on the upside, Crude oil needs to break massive resistance 6595.
Hence, we expect, Crude oil prices may consolidate in between 6230-6595 levels unless either side breaks.
Today, a break below 6320 will create a probability for short time correction towards 6240.
On the upside, immediate resistance is seen at 6450 and a break above it could open the door for pullback. And prices may test next resistance 6485-6545.
Further, today at 9PM- Crude Oil Inventories due to release, with forecast at 1.3M compared to previous data 1.2M. If the data will come according to the forecast, then Crude oil may extend recent fall or vice versa.Â