Crude oil price rose to its highest level in more than two weeks on Tuesday as traders dismissed the weekly increase in crude inventories from the American Petroleum Institute (API).
Additionally, the dollar retreated from intraday highs and fell after a weaker-than-expected US retail sales report for May also weighed on prices as government bond yields fell.
Energy markets are betting on an upswing in fossil fuel demand heading into summer to sop up extra supply throughout global Crude Oil markets, even as the Organization of the Petroleum Exporting Countries (OPEC) and its extended network of non-member ally states, OPEC+, prepares to axe voluntary production cuts that were meant to support Crude Oil prices and crimp global supply.
According to the API, US Weekly Crude Oil Stocks rose 2.264 million barrels for the week ended June 14, clamping down on the previous week’s -2.428-million-barrel drawdown. Distillate Stocks also rose 538K barrels, though Gasoline Stocks Change declined 1.077 million barrels, though significantly less than the previous week’s -2.549-million-barrel drawdown. Investors with a calculator nearby will note that this week’s 2.264-million-barrel addition to API weekly counts brings the supply overhang of US Crude Oil to over 17 million barrels since the first week of January 2024.
Retail sales rose 0.1% last month after a downwardly revised 0.2% drop in April, the U.S. Commerce Department said. The result was below expectations of economists polled by Reuters for a gain of 0.3%, and indicated that economic activity was slowing as higher interest rates affect consumer spending patterns.
Other data showed U.S. business inventories rebounded in April, increasing by 0.3% after slipping 0.1% in March.
Further, Geopolitical turmoil continues to attack a fear premium to Crude Oil markets after a Ukranian drone strike successfully ignited a Russian fuel tank facility this week, and Israel-Palestinian tensions continue to simmer. Coupled with ambiguous hopes of a summertime uptick in demand, energy markets are shrugging off bearish factors, like US Crude Oil overproduction and disappointing Chinese demand figures last week.
Technical Outlook : Crude Oil Price
The price of crude oil exceeded 1.70% yesterday. Prices touched a two-week high of 6813 and settled at 6786, compared to the previous day’s high of 6670.00
In the above chart, the formation of a three white soldiers candlestick pattern suggests bullish momentum in the near term. Furthermore, prices are trading near several resistance levels. A close above 6825 will bring further gain and prices may rise to 6915-6980.00
On the downside, there is immediate support between 6650-6450.00.
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Commodity Samachar
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