Crude oil price retreated from the day’s highs as a surprise rise in U.S. inventories fueled fears of sluggish demand from the biggest oil consumer, although concerns a possible escalation in the Gaza war could disrupt limited supplies in middle east.
The U.S. Energy Information Administration (EIA) reported a 3.6-million-barrel jump in the country’s crude oil stocks last week, surprising analysts polled by Reuters who had expected a 2.9 million-barrel drawdown’s. gasoline stocks also rose by 2.7 million barrels, compared with analysts’ expectations for a 1 million-barrel draw.
Product supplied for motor gasoline, a proxy for demand, fell by about 417,000 barrels per day last week, to 8.97 million bpd. The four-week average for demand is about 2% under last year’s levels.
Ueno said the weak consumption despite the peak U.S. summer driving season had caused concern among traders.
In the Middle East, cross-border strains between Israel and Lebanon’s Hezbollah have been escalating in recent weeks, stoking fears of an all-out Israel-Hezbollah war that could draw in other regional powers, including major oil producer Iran.
Turkish President Tayyip Erdogan said his country stood in solidarity with Lebanon and called on regional countries’ support.
Meanwhile, Israeli forces pounded several areas across Gaza on Wednesday, and residents reported fierce fighting overnight in Rafah in the south of the Palestinian enclave.
Technical Outlook: Crude oil Price
Crude oil retreated from the day’s high 6828 and settled at 6805 compared to previous day’s close of 6771.00.
Since last week, Prices struggling to cross the key resistance 6850 and consolidating above the support zone 6700.00. However, prices are yet trading above the SMA.
It’s expected that, prices could be struggled in above range unless gives either side break. A break above the resistance of 6850 will extend the gain towards 6950-7000+.
Else, on the downside, a break below 6700 will put pressure towards 6620-6550.00.
Adding to this, a basket of Economic serious due to release from US today, any positive sign could support the prices or a vice a versa.
Happy Trading!
Commodity Samachar
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