Crude Oil Fell Amid The Easing Of Middle East Tensions.

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Crude Oil Fell Amid The Easing Of Middle East Tensions.

Crude oil prices experienced a downturn, settling at 7179, marking a decline of -1.44% yesterday. This drop can be attributed to the easing of tensions in the Middle East, particularly with Israel withdrawing troops from Southern Gaza and the resumption of peace talks between Israel and Hamas in Egypt. These developments have alleviated concerns that previously fueled a rally in oil prices. On the supply side, Saudi Arabia's decision to raise official selling prices for all crude grades to Asia in May reflects tightening global supply conditions. However, disruptions such as the fire on a Pemex-operated offshore platform in Mexico, resulting in casualties, underscore ongoing challenges in the oil market.

In terms of demand, stronger-than-expected US jobs data have bolstered optimism about the demand outlook in the world's largest oil consumer. Additionally, upcoming inflation readings in the US and China are awaited by investors for further insight into economic trends. The Energy Information Administration's report indicated mixed inventory data, with crude stocks rising by 3.2 million barrels, contrary to analysts' expectations of a drawdown. However, gasoline and distillate inventories saw declines.

From a technical standpoint, the market is currently experiencing long liquidation, evidenced by a drop in open interest by -34.22%. Prices are down -105 rupees, with support levels at 7112 and potential resistance at 7248. A breakthrough above this resistance could lead to a testing of 7316 levels.

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