Crude oil rose driven by expectations of a tightening global oil market.

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Crude oil rose driven by expectations of a tightening global oil market.
Credit: © Reuters.

Crude oil had a significant gain of 2.22%, closing at 7,501, driven by expectations of a tightening global oil market. The International Energy Agency highlighted ongoing supply cuts from major producers like Saudi Arabia and Russia, leading to a notable market deficit in the fourth quarter. 

OPEC also projected a substantial 3.3 million barrel per day deficit, while the US Energy Information Administration had a more conservative estimate of a 230,000-barrel deficit. However, there was a surprise in US crude oil stockpiles, which increased for the first time in a month. This was due to higher imports and production recovery to pre-pandemic levels. Crude inventories rose by 4 million barrels, surpassing expectations for a 1.9 million-barrel drop. Crude stocks in Cushing, Oklahoma, fell to their lowest levels since December, while inventories on the Gulf Coast rose significantly. Additionally, US crude imports reached their highest rate since January 2022. 

From a technical standpoint, the crude oil market saw fresh buying, with a 19.09% increase in open interest, settling at 8,004. Prices surged by 163 rupees. Crude oil's support is at 7,406, with the potential for a test of 7,311, while resistance is expected at 7,554, and a breakthrough could lead to a testing of 7,607.

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