Crude oil prices traded almost flat to negative yesterday. Prices retreated slightly after Federal Reserve Chair Jerome Powell highlighted. That banking sector credit risks for the world’s largest economy, while U.S. crude stocks rose more than expected.
Further, Oil prices extended losses today also. On worries about a potential oversupply after U.S. Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve (SPR) may take several year.
Brent crude futures settled at $75.52% down by 0.30% a barrel, while U.S. West Texas Intermediate crude (WTI) down 0.63%, to $69.43. Both crude benchmarks settled on Wednesday at their highest closes since March 14. After the dollar slid to a six-week low. MCX crude oil future settled at 5790, down by 0.84%.
Powell said on Wednesday that banking industry stress could trigger a credit crunch. With significant implications for an economy that U.S. central bank officials projected would slow even more this year than previously thought.
Consultancy Wood Mackenzie said that China was expected to account for around 40% of the increase in global oil demand this year. As its economy emerged from strict lockdowns. Prospects of demand recovery in the world’s top crude importer, China, could also keep prices supported.
Meanwhile, U.S. crude oil stockpiles rose unexpectedly last week to their highest in nearly two years. Latest data from the Energy Information Administration (EIA) showed.
Crude inventories rose in the week to March 17 by 1.1 million barrels to 481.2 million barrels, the highest since May 2021. Analysts in a Reuters poll had expected a 1.6-million-barrel drop.
Gross U.S. exports of crude oil and oil products hit a new high just shy of 12 million barrels per day. Way above any other country’s supply levels, the analysts added, citing EIA data.
Technical View-Crude oil will expect to consolidate
Crude oil prices witnessed a sharp pullback from the low 5290 (20 March 2023) and recently made a high 5876. Yesterday, prices remained in a small range between 5780-5840 and settled down by 0.83% at 5790.
Cluster of indecisive candle sticks on the above chart is indicating an indecisive momentum in Crude oil prices.
On the downside, immediate support is seen at 5720, below it Oil prices may witness correction towards 5650-5550. Else, Prices may witness positive consolidatation in between 5770-5955 in near future.
For short time, any dip towards 5750-5760 could witnessed some pullback. And prices may test immediate resistance 5860-5950.