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Crude Oil Prices Drop as U.S. Crude and Fuel Inventories Report Shows Increase

ByKedia Advisory
Published 19-09-2024, 10:36 am
CVX
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XOM
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Crude oil prices declined by -1.27%, settling at 5,913, as an industry report indicated increasing U.S. crude and fuel inventories, outweighing concerns about rising tensions in the Middle East and the potential bullish impact of a U.S. interest rate cut. Demand concerns persist, particularly from China, where recent data has raised worries about the country's sluggish economic recovery. China's crude oil imports in August dropped 7% year-on-year, reflecting weak refining margins and low fuel consumption, though imports recovered slightly from July's levels. China's annual demand growth has slowed significantly, from around 500,000-600,000 barrels per day (bpd) before the pandemic to about 200,000 bpd.


Meanwhile, supply concerns in the U.S. eased as 12% of crude production in the Gulf of Mexico remained offline, down from over 40% at the peak disruption caused by Hurricane Francine. Major oil companies like Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX) have begun restarting operations in the region. On the inventory front, crude oil inventories in the U.S. fell by 1.63 million barrels for the week ending September 13, exceeding market expectations of a 0.1 million barrel decrease. Additionally, crude stocks at the Cushing delivery hub dropped by 1.979 million barrels. Gasoline and distillate stockpiles rose slightly, but both were below market expectations.


Technically, the market is experiencing long liquidation, with open interest dropping by -59.23% to 3,704 as prices fell by -76 rupees. Crude oil is finding support at 5,824, with a potential test of 5,736 if this level breaks. Resistance is likely at 5,991, and a move above this could see prices testing 6,070.

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