Oil prices are under downward pressure from the Federal Reserve's decision not to cut interest rates in the near term, as well as from high US oil and fuel inventories.
Higher Fed borrowing costs tend to slow economic growth and consequently may limit oil demand.
Fed Chairman Jerome Powell noted in a press conference at the end of the two-day meeting that inflation has been falling without a major drag on the economy, adding that there's no reason to believe it can't continue.
Traders are also watching the ongoing ceasefire talks in Gaza, which, if resolved favorably, will ease concerns about potential supply disruptions from the oil-producing region.
According to yesterday's data from the Energy Information Administration (EIA), US crude oil inventories rose more than expected last week, largely due to a jump in imports. As a result, crude oil inventories stood at 1.233 million barrels last week. The forecast was negative (-1.200 million barrels), while the actual value of 3.730 million barrels was much higher than expected.
Gasoline inventories also rose more than expected, coming in at 2.566 million barrels, compared with the forecast of 0.250 million and last week's 2.102 million.
On the other hand, the crude oil stock surplus decreased to -1.593 million barrels, compared to the previous week's estimate of 0.854 million barrels.
Weekly crude inventories according to the American Petroleum Institute (API) also fell from a level of 4.052 million barrels to -2.428 million.
Such mixed estimates of US crude oil and fuel inventories do not provide a clear picture of the crude inventory balance.
To assess the sentiment of traders in the crude oil market, let's turn to the CME data. As of this morning (in the Eastern Hemisphere), the volume of CALL positions amounted to 85045 contracts, and the volume of PUT positions amounted to 72130 contracts, i.e. buying positions predominate, including Brent oil.
From the technical perspective, the price level of $84 per barrel can be the target for Brent strengthening.
The overall recommendation is to buy Brent oil.
Profit could be taken at the level of 84.0. A stop loss could be set at 80.5.
Potential losses should not exceed 2% of your account balance.
This content is for informational purposes only and is not intended to be investing advice.
