The price of oil rose by more than two percent yesterday. This was yesterday’s biggest intraday gain since March 1, 2024. A surprise drops in US crude inventories, a larger-than-expected drop in US gasoline inventories and possible temporary disruptions after Ukraine’s attacks on Russian refineries led to aggressive buying soon.
The U.S. Energy Information Administration (EIA) said energy firms pulled a surprise 1.5 million barrels of crude from stockpiles during the week ended March 8.
That compares with the 1.3 million barrel build analysts forecast in a Reuters poll and the 5.5 million barrel withdrawal shown in data from the American Petroleum Institute (API), an industry group. [EIA/S] [EIA/A]
U.S. gasoline futures, meanwhile, showed the biggest price increase across the energy complex, rising about 2.8% to their highest since September 2023 after EIA said energy firms pulled a much larger-than-expected 5.7 million barrels of gasoline from stockpiles last week.
That compares with the 1.9-million barrel withdrawal from gasoline stocks that analysts forecast in a Reuters poll.
That increase in gasoline prices boosted the gasoline- and 321- crack spreads, which measure refining profit margins, to their highest since August and September 2023, respectively.
Adding to this, In Russia, Ukraine struck oil refineries in a second day of heavy drone attacks, causing a fire at Rosneft’s biggest refinery in what Russian President Vladimir Putin said was an attempt to disrupt his country’s presidential election this week.
Putin told the West that Russia was technically ready for nuclear war and that if the U.S. sent troops to Ukraine, it would be considered a significant escalation of the conflict. Putin, however, also said he saw no need for the use of nuclear weapons in Ukraine.
Oil and the wider financial markets also found support from sentiment that the latest U.S. inflation will not derail interest rate cuts by mid-year. Lower rates can boost economic growth and support oil demand.
The Organization of the Petroleum Exporting Countries (OPEC), meanwhile, stuck to its forecast for oil demand growth of 2.25 million barrels per day (bpd) in 2024, higher than many other forecasts.
The International Energy Agency (IEA), which expects demand growth to be much lower, updates its forecasts on Thursday.
Technical Outlook
Crude oil prices witnessed more than 2% intraday gains yesterday, that was biggest single day gains since 1 March 2024. Settled at 6579 compared to previous day’s close of 6447.00
On the above chart, prices broke a bullish pennant resistance and formed a long bullish candle stick. Both of which are indicating for strengthen to be continued in near future. Further, RSI 14 And its 9 SMA also giving a bullish crossover.
Hence, a break above 6585 will lead prices towards next resistance 6650-6720 very soon. Else, any dip towards 6500-6480 likely to attract buying activities.
On the downside, crucial support is seen at 6380 only below it prices could retreat towards 6320-6250.00
Commodity Samachar
Learn and Trade with Ease
Also Read:Â US Macroeconomic numbers will lead market today , Mindblowing Crash in Indian Stock Market, Is it the End or Beginning?
Recommended Read: Forex News Letter: Is Silver Ready to Steal Gold’s Spotlight?
Want help on your traders?
Chat with our Analyst