Crude Oil News: Is the Price Drop Just Beginning?

Crude Oil News: Is the Price Drop Just Beginning?

The Crude Oil News is in and the hottest news there is if the price drop is just the beginning of things to come.

The price of oil fell by more than one percent on Wednesday. Prices fell for a third straight day on expectations that a US tax cut would be delayed due to lingering inflation that could weigh on demand in the world’s biggest oil user.

Markets also fell as US crude and gasoline inventories rose last week, market sources said, citing data from the American Petroleum Institute (API) on Tuesday. Analysts expected them to fall..

Brent crude futures were down 1.01 %, at $81.66 a barrel, while U.S. West Texas Intermediate crude (WTI) was down 81 cents, or 1.22%, to $77.20. MCX Crude down 1.16% at 6492.00

In the latest crude oil news, the crude oil prices held modest losses after today’s weekly EIA report showed an unexpected increase in crude oil last week.

The weekly EIA report was mainly down on oil and products. EIA crude inventories unexpectedly rose by +1.83 million bbl, compared to an expected value of -2.0 million bbl. EIA gasoline inventories also fell by -945,000 bbl, less than expected by -1.375 million bbl. Additionally, distillate inventories increased by +300,000 bbl to +379,000 bbl. Finally, crude supplies at the Cushing WTI futures delivery site rose by +1.33 million bbl to a 10-month high.

Adding to this, Higher than-expected Russian crude output is bearish for oil prices. According to Bloomberg calculations based on official data, Russian crude production in April was 9.418 million bpd, more than +300,000 bpd above the 9.1 million bpd target Russia agreed to with OPEC+. Also, Russian crude processing averaged 5.45 million bpd in the first half of May, up 4% above April’s level as refineries recovered from Ukrainian drone strikes.

In addition, Russia’s fuel exports have increased as refineries came back online after being damaged by Ukrainian drone attacks. Russian fuel exports in the week to May 19 rose about 140,000 bpd from the prior week to 3.39 million bpd.

An increase in crude oil in floating storage is bearish for prices. Monday’s weekly data from Vortexa showed that the amount of crude oil held worldwide on tankers that have been stationary for at least a week rose +15% w/w to 69.27 million bbl as of May 17.

Technical Outlook – Crude Oil News

Crude oil retreated from an intraday high of 6,538 and fell to 6,492, up 1.16%. Prices continued to decline since May 20, 2024, falling from a high of 6,721 to a recent low of 6,488.00.

The uncertain candlestick on the chart above shows volatile price momentum. Moreover, prices followed a bearish consolidation pattern, trading between 6720 and 6500 for the last few days.

Now, a minor break of this consolidation will extend the decline and the price may touch the next support at 6350-6250.00.

Otherwise, an increase to 6680-6700 will squeeze again.

Happy Trading!

Commodity Samachar
Learn and Trade with Ease

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