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Crude Oil Rose On Projections Of Increased Summer Demand And Geopolitical Concerns.

Published 25-06-2024, 03:23 pm
© Reuters.  Crude Oil Rose On Projections Of Increased Summer Demand And Geopolitical Concerns.

Yesterday, crude oil prices settled up by 1.13% at 6,822 as traders balanced expectations of increased summer demand and geopolitical tensions against a stronger dollar. The escalation of geopolitical tensions in the Middle East further heightened concerns about oil supply. Israeli forces advanced into Rafah in the Gaza Strip, and fears of an "all-out war" with Hezbollah in Lebanon were expressed by a senior Israeli official. Oil prices have also been supported by robust global demand growth forecasts. Key organizations like OPEC, the International Energy Agency (IEA), and the U.S. Energy Information Administration (EIA) predict strong oil demand growth in the second half of this year.

Additionally, OPEC+ members such as Russia and Iraq have reaffirmed their commitment to production quotas, with Saudi Arabia signaling a willingness to adjust output based on market conditions. Investor sentiment has improved since OPEC+ announced plans to increase production starting in October, driven by expectations of stronger future demand. Data from the U.S. Energy Information Administration (EIA) showed a significant rise in total product supplied, increasing by 1.9 million barrels per day to 21.1 million bpd in the week ending June 14. U.S. crude oil stocks fell by 2.547 million barrels, exceeding market expectations of a 2 million barrels decline. However, crude stocks at the Cushing, Oklahoma delivery hub increased by 0.307 million barrels.

Technically, the market is experiencing fresh buying, with a 10.4% gain in open interest settling at 4,935 contracts, while prices rose by 76 rupees. Crude oil is finding support at 6,739, with potential to test 6,655 levels if this support fails. Resistance is likely at 6,868, and a move above this level could see prices testing 6,913.

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