Crude Oil price dropped over one percent on Wednesday on rising U.S. crude inventories, while the risk of Iranian supply disruptions caused by the Middle East conflict and Hurricane Milton in the United States curbed price declines.
Brent crude futures LCOc1 were down 82 cents, or 1% at $76.36 a barrel. U.S. West Texas Intermediate (WTI) futures CLc1 lost 62 cents, or 0.8%, at $72.95.
Crude inventories jumped by 5.8 million barrels to 422.7 million barrels last week, the Energy Information Administration said, compared with analysts’ expectations in a Reuters poll for a 2 million-barrel rise.
The country is bracing for a second one, Hurricane Milton, which is expected to make landfall as a major storm in Florida on Wednesday. The storm has already driven up demand for gasoline in the state, which has helped support crude prices.
Further, focus also on China, Brent and WTI both gained more than 1% earlier in the session after prices had plunged on Tuesday by more than 4% on a possible Hezbollah-Israel ceasefire, though markets remain wary of a potential Israeli attack on Iranian oil infrastructure.
China said on Tuesday it was “fully confident” of achieving its full-year growth target but refrained from introducing stronger fiscal steps, disappointing investors who had banked on more support for the economy.
Investors have been concerned about slow growth dampening fuel demand in China, the world’s largest crude importer.
Weak demand continues to underpin the fundamental outlook. The U.S. Energy Information Administration (EIA) on Tuesday downgraded its demand forecast for 2025 on weakening economic activity in China and North America.
Investors are awaiting developments from expected talks between U.S. President Joe Biden and Israeli Prime Minister Benjamin Netanyahu over intensifying conflict in the Middle East.
The oil-producing region has been on high alert for any Israeli response to an Iranian missile attack last week in retaliation for Israel’s military escalation in Lebanon.
Technical Outlook – Crude Oil Price
Crude oil price have retraced from the recent peak of 6495, seen earlier this week, and have declined to a low of 6012 as of yesterday. The session closed at 6119, compared to the previous close of 6244.
On the technical chart, prices are attempting to find support around the previous demand zone at 6020. A sustained hold above this level could lead to a potential rebound towards the 6150-6250 range.
However, if the price breaks below the 6020 support, it is likely to extend the decline towards the 5920-5870 levels. In conclusion, a near-term bounce is anticipated, provided the 6020 support level holds
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