An API industry report was released in the second half of the U.S. session today, indicating a continuation of the weekly increase in U.S. crude oil inventories. The American Petroleum Institute reported that crude oil inventories rose by 347,000 barrels, up from -5.2 million barrels last week.
The industry report came on the eve of the release of official U.S. inventory data for the previous week. As a reminder, the Energy Information Administration is scheduled to release the data today. Crude oil inventories are expected to fall from 1.35 million barrels to -2 million barrels. If this forecast does not come true and crude oil inventories are above 1 million barrels, this will push oil prices lower again.
In addition, the risks of geopolitical escalation in the Middle East are diminishing rather than remaining uncertain.
The U.S. Secretary of State, Anthony Blinken, left the region Tuesday night without a ceasefire agreement, but noted that Israel had agreed to an interim deal to create space for the conflicting parties to work out the details of a peace settlement. The options markets subsequently lost their optimism as hopes for a ceasefire grew.
Fundamentally, China's sluggish economy offsets OPEC+ supply cuts.
Investors are also awaiting new U.S. economic data as lower inflation could lead the Federal Reserve to ease interest rates, which would stimulate broader energy demand.
In terms of technical analysis, Brent crude oil prices are targeting their medium-term support at $72 per barrel.
The overall recommendation is to sell Brent starting from the 79.50 level.
Profit could be taken at the level of 72.0. A stop loss could be set at 81.0.
The volume of the opened position should be set so that the value of a possible loss, defined with a protective stop order, does not exceed 2% of your deposit.
This content is for informational purposes only and is not intended to be investing advice.
