Crude oil strengthened amid an improving global demand outlook

  • Kedia Advisory
  • Commodities News
Crude oil strengthened amid an improving global demand outlook
Credit: © Reuters.

Crude oil edged up 0.4% to $75.31, buoyed by a brighter global demand outlook and supply constraints. China's central bank's reduction of cash reserve requirements for all banks aimed to boost economic recovery, particularly in the top crude-importing nation. Anticipation that major central banks are nearing the end of tightening monetary policies also lifted market sentiment. On the supply front, OPEC, the US government, and the International Energy Agency all projected a market deficit in Q4 due to extended supply cuts by Saudi Arabia and Russia.

Saudi Arabia and Russia jointly extended 1.3 million barrels per day of production cuts through year-end, accelerating the drawdown of global oil inventories. These supply concerns propelled Brent and WTI benchmarks to their highest levels since November. While China's post-pandemic recovery had raised demand concerns, August data showed faster-than-expected growth in industrial output and retail sales. Oil refinery processing increased by nearly 20% YoY, as processors maintained high run rates to meet global oil product demand.

From a technical standpoint, the market saw short covering with a 40.18% drop in open interest and a price increase of 30 rupees. Support for crude oil is at 7,442, with a potential test of 7,354 on the downside. Resistance is likely at 7,593, with the possibility of prices reaching 7,656 upon breaking that level.

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

Error: File type not supported

Drop an image here or


Related Articles