High demand and low US oil inventories propel Brent price growth

According to the latest Energy Information Administration (EIA) report, crude stockpiles in the United States shrank by 6 million barrels to 420.7 million barrels last week, while experts had predicted a decline of only 1.8 million. The EIA also stated that over the past seven days, oil production in the country decreased by 1.22 million barrels per day (bpd). Crude exports, on the contrary, rose by 795,000 bpd to 4.37 million bpd. Higher demand from American refineries served as another source of support for energy prices. Over the week, the plants' processing volumes increased by 28,000 bpd, with the utilization rate rising by 0.2 percentage points to 96.6%.

Supplies of refined oil in the US—a key demand indicator—surged to 21.5 million bpd in the same period, up 149,000 bpd from the week before. Gasoline inventories fell by 2.7 million barrels to 223.6 million barrels against an anticipated drop of 915,000 barrels. According to the EIA report, the four-week average for jet fuel consumption hit its highest level since 2019.

The released data provide support for the oil market. From a technical perspective, Brent prices are poised to form a horizontal resistance level, which would then serve as the next target for a breakdown. For a clearer technical picture, oil should drop to the support at $66.2 per barrel, then bounce off this threshold toward $67, ultimately setting $68 in view.

The overall recommendation is to buy Brent from $66.2. Profits should be taken at the level of $68. Stop Loss could be set at $65.8.

The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance does not allow opening a position of this size, it is better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.