The price of crude oil rose yesterday for the second time in a row to the highest level in several months. Prices continued to rise as traders assessed how Ukraine’s recent attacks on Russian refineries would affect global oil supplies.
The global Brent crude benchmark is at its highest since Nov. 3.
Ukraine has stepped up its attacks on Russian oil infrastructure this year. at least seven refineries targeted by drones this month. Reuters calculations show the attacks shut down 7%, or about 370,500 barrels a day, of Russia’s refining capacity.
While lower refining activity has led to an increase in Russian crude oil exports, it could also lead to crude oil production cuts as the country faces storage constraints, StoneX energy analyst Alex Hodes said.
Based on Hodes’ calculations, the attacks on Russian refineries could result in a decrease of around 350,000 bpd of global petroleum supplies and boost U.S. crude prices by $3 per barrel.
Even if the attacks do not lead to a direct loss of Russian crude supply, there is still a spillover effect for oil prices from surging refined product margins, SEB Research analyst Bjarne Schieldrop wrote on Monday.
Adding to this, Oil gained support from declining crude exports from Saudi Arabia and Iraq, as well as signs of stronger demand and economic growth in China and the U.S.
U.S. single-family homebuilding rebounded sharply in February, the Commerce Department reported. Homebuilding could boost economic growth, supporting oil demand.
Today, US FOMC meeting a will give direction for the prices.
Technical Outlook – Crude Oil
Crude oil continued to rise for the sixth day in a row. Prices hit a multi-week high of 6,955 yesterday and fell to 6,950, up 1.55%.
As the March 14, 2024 outlook broke through resistance, prices touched both of the projected 6,650-6,720.00 levels at 6,585
However, a bullish candlestick on the chart indicates an uptrend in the near term. However, after a sharp rally in recent days, it may face resistance at 6995 before the next move.
Therefore, any decline to 6850-6800 is likely to attract buying activity for the rising levels 6995-7050.00.
Commodity Samachar
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