Crude Oil Steadied Driven By Speculation That Opec+ Will Continue Supply Cuts.

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Crude Oil Steadied Driven By Speculation That Opec+ Will Continue Supply Cuts.
Credit: © Reuters.

Crudeoil settled slightly lower by -0.11% at 6513, driven by speculation surrounding OPEC+ continuing supply cuts, which could gradually tighten the market. The Energy Information Administration's report indicated an increase in crude inventories for the fifth consecutive week, rising by 4.2 million barrels to 447.2 million barrels, surpassing expectations. 

Gasoline stocks fell for the fourth week, decreasing by 2.8 million barrels to 244.2 million barrels, nearly double the forecasted draw. Refinery utilization rates rose slightly, contributing to the dynamics of the oil market. All eyes are now on the upcoming OPEC+ meeting in March, where discussions about extending output cuts will take place. Producers are expected to maintain voluntary production limits until at least the June Ministerial Meeting to stabilize the market. 

The market is technically under fresh selling pressure, with a 1.91% increase in open interest to settle at 6246 contracts. Despite prices being down by -7 rupees, the support level is identified at 6467, with a potential test of 6420 on the downside. Resistance is likely at 6565, and a breakout could lead to further testing of 6616 levels. Additionally, geopolitical factors such as the uncertainty surrounding the ceasefire between Israel and Hamas and ongoing Houthi attacks on Red Sea shipping have added a risk premium to oil prices, contributing to the overall market sentiment.

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