Crude oil Prices retreated more than 2.40% from the previous day’s high 6697 and trading at 6415 levels. Oil prices came under pressure as markets gauge U.S. inventory build and recession fears.
Crude prices Wednesday initially rallied to a 6-week high after the dollar index tumbled to June 2022 low. Also, Wednesday’s monthly outlook from the International Energy Agency (IEA) predicted that global oil demand will reach a record daily average this year with the reopening of China’s economy.
Strength in the crude crack spread is positive for oil prices after the crack spread today climbed to a 1-3/4 month high. The higher crack spread encourages refiners to boost their crude purchases to refine it into gasoline and distillates.
Later today at 9.30pm, Energy Information Administration will release Crude oil Inventory with forecast of -2.1M as compared to previous 19.0M. Crude oil prices will react according to the data, a less than forecast will create a probability for temporary pullback in oil prices.
On the daily chart, since 5 December 2022, Crude oil prices struggling to cross massive resistance 6780 on closing basis and retracing towards 6200-6100 levels. In the near future, oil prices is expected to trade in the above range unless there is a break on either side. On the downside, a break below 6290 would confirm the downside target of 6230-6175. Alternatively, any rise towards 6620-6650 may provide a selling opportunity with a stop-loss above 6785.00
On the other hand, if oil prices cross above 6785 on closing basis then we could expect upside level towards 6850-6900.