Crude Oil Fell Following A Surprise Rise In US Crude Stockpiles.

  • Kedia Advisory
  • Commodities News
Crude Oil Fell Following A Surprise Rise In US Crude Stockpiles.
Credit: © Reuters.

Crude oil prices declined by 1.16% yesterday, settling at 6,492 INR, following an unexpected rise in U.S. crude stockpiles. The Energy Information Administration (EIA) reported an increase of 1.825 million barrels in U.S. crude inventories last week, contrary to market expectations of a 2.55 million barrel decrease. Additionally, distillate stockpiles rose while gasoline stocks fell less than anticipated. The American Petroleum Institute (API) also reported a 2.48 million barrel increase in crude inventories. The geopolitical risk premium from Middle Eastern tensions has diminished as oil supplies have not been disrupted. 

Market participants are now focusing on the upcoming OPEC+ meeting on June 1, where major oil producers are expected to extend output cuts to prevent global oversupply and support prices. Data from the U.S. Energy Information Administration highlighted a significant drop in weekly crude oil imports from Mexico to 184,000 bpd, the lowest on record. The physical crude markets have shown signs of weakening, as evidenced by the narrowing premium of Brent 's first-month contract over the second, known as backwardation, which is at its lowest since January. This trend indicates easing concerns over tight prompt supply. 

Technically, the crude oil market is experiencing fresh selling pressure, with open interest increasing by 21.43% to settle at 7,026 contracts while prices dropped by 76 rupees. Crude oil is currently supported at 6,452, with further support expected at 6,412 if this level is breached. On the upside, resistance is anticipated at 6,535, and a move above this level could see prices testing 6,578.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or

100

Related Articles