Buying Brent to level 76.50 on sharp decline in US oil inventories

Today, the American Petroleum Institute (API) published its regular weekly data on crude oil and fuel inventories in the United States. Inventory volumes showed a decrease both in comparison to last week's figures and to the forecast estimate. Last Thursday, the US held 10.9 million barrels in stocks, and it was forecasted to fall to 3.2 million while the actual volume amounted to -1.58 million barrels.

Gasoline stocks fell 5.93 million barrels and distillate stocks fell 2.67 million barrels.

Later today, the Energy Information Administration (EIA), the statistical agency within the US Department of Energy, is also to release its data at 11:00 am ET (18:00 GMT+3.00).

As historical records show, there is a close correlation between the estimates of the American Petroleum Institute and the Energy Information Administration, and the API data tends to forestall the EIA estimates.

If the US Department of Energy also reports a significant drop in crude oil inventories, it will support the market.

On the other hand, this week the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency lowered their demand forecasts for 2024 and 2025.

Besides that, the uncertainty over the unfolding situation in the Middle East remains.

And finally, investors are awaiting further details from Beijing on its ambitious plans to stimulate the faltering economy, which were announced earlier on October 12.

Brent prices are likely to be supported by the European Central Bank, set to cut interest rates again at today's meeting. This would be the first consecutive rate cut for the regulator in 13 years. The ECB is now gradually shifting its focus from fighting inflation in the eurozone towards economic growth protection.

According to the combination of factors, one may conclude that in the short term, Brent crude oil prices are set to rise.

The final recommendation is to buy Brent oil with a pending limit order from 73.50.

The profit is taken at the level of 76.50. The loss is fixed at the level of 72.00.

The volume of the opened position should be determined in such a way that the value of the possible loss, fixed with the help of a protective stop order, is no more than 2% of the size of your deposit funds.