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Crude Oil Gains After Solid Projections For Crude Oil And Fuel Demand.

Published 18-06-2024, 03:03 pm
© Reuters Crude Oil Gains After Solid Projections For Crude Oil And Fuel Demand.

Crude oil prices increased by 1.46%, closing at 6,670, supported by optimistic projections for crude oil and fuel demand. The Organization of Petroleum Exporting Countries (OPEC) maintained its forecast for robust global oil demand growth in 2024, despite lower-than-expected usage in the first quarter. OPEC projects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024 and by 1.85 million bpd in 2025, driven by travel and tourism in the second half of the year. The report indicated that steady global economic growth has persisted in the first half of 2024, with an anticipated increase of 2.3 million bpd in the second half.

Goldman Sachs (NYSE:GS) also forecasted solid U.S. fuel demand this summer, adding to the bullish sentiment. However, the International Energy Agency (IEA) expects oil demand to peak by 2029 and stabilize around 106 million bpd towards the end of the decade. U.S. crude oil stocks rose by 3.730 million barrels for the week ending June 7, 2024, the largest increase in six weeks, contrary to market expectations of a 1.55 million barrel decline, as reported by the EIA Petroleum Status Report. Gasoline stocks surged by 2.566 million barrels, exceeding expectations of a 1.25 million rise, and distillate stockpiles increased by 0.881 million barrels, above the consensus of 0.50 million. Conversely, crude stocks at the Cushing, Oklahoma delivery hub fell by 1.593 million barrels, following a previous week's build of 0.854 million barrels.

Technically, the crude oil market is experiencing short covering, with a significant drop in open interest by 47.73% to 2,924 contracts, while prices increased by 96 rupees. Crude oil finds support at 6,582, with a potential test of 6,493 if this level fails. Resistance is expected at 6,719, and a move above this level could see prices testing 6,767.

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