Crude Oil News: Price Hit Five Months Low- How Will The Fed Impact Inventory?

As per the latest crude oil news reports coming in and the technical charts we’ve been watching, the price of oil fell by more than four percent yesterday. Prices fell to three- to five-month lows as traders bear down ahead of the final Federal Reserve meeting of the year, while signs that US inventories are consolidating offered little support.

Concerns about weaker demand, tighter supplies and higher interest rates sent oil prices sharply lower this week as the market remained reluctant to cut output until 2024 by the Organization of the Petroleum Exporting Countries (OPEC+).

Record high US output and growing concerns about slowing Chinese demand also weighed on crude, as did uncertainty over further monetary policy signals from the central bank.

 Brent crude futures for February settlement were down 3.53% at $72.89 a barrel, while West Texas Intermediate crude futures were down 3.72% at $68.71 a barrel as per the latest crude oil news. MCX Crude fell 4.22% to 5,717.00. All contracts were the weakest  since July.

 The Energy Information Administration’s (EIA) low oil price outlook also had an impact, as the EIA cut its 2024 Brent forecast by $10  to $83 a barrel.

 US inventories fall, but gasoline stocks rise – API Data from the American Petroleum Institute (API) showed that US crude inventories  fell more than expected in the week ending December 8, 2023. 

 But the potential draw comes after several consecutive weeks of strong construction. The API data also showed an increase of 5.8 million barrels in gasoline inventories, another sign of slowing US fuel consumption.

 API data will generally give a similar reading to official inventory data later in the day, which is expected to show  1.5 million barrels. 

Gasoline inventories are expected to rise by 2.4 million barrels, while US production remains at a record high.

High U.S. production, even as the country’s rig count declines, also sparked controversy in the  oil market as the country ramped up production to fill the gap left by  OPEC. 

Now, today we will focus on Fed and EIA inventory data. The central bank expects to keep interest rates unchanged at 5.50 percent today, with a focus on the outlook for 2024, especially plans for rates.

Technical Outlook – Crude Oil News:

The pressure on crude oil continued, yesterday prices closed to 5715 down 4.20%. Today traded at 5713 level down 0.07%.

 According to the outlook given on December 6, 2023, which proved to be correct. After breaking the support, 5995 fell to the suggested target of 5880-5720.00.

 The falling formation of three candlesticks on the above chart still indicates a bearish trend. In addition, prices broke key support according to the Elliott Wave bet, which also indicated a bearish trend.

 Based on the above technical aspects, the price of crude oil should approach a new multi-week low, which would soon be 5650-5590-5535.

 Alternatively, expect a possible pullback if prices do not break above the 5490.00 mark.

Commodity Samachar
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Also Read: Fed Meeting In Focus: What to Expect While Market Awaits? , US Dollar in Focus: Will the US CPI give final cues for Fed meeting?

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