Crude oil dropped as US crude inventories unexpectedly jumped by 5.04 mbls

yesterday settled down by -1.29% at 5957 due to yet another release from the Strategic Petroleum Reserve, US crude stocks unexpectedly increased by 5.04 million barrels last week, the biggest in twelve weeks. The International Energy Agency stated that the prognosis for a limited supply and strong demand later in the year conflict with the weeks of decreasing oil prices brought on by worries about a potential recession. The tighter market balances we foresee in the second half of the year when demand is anticipated to exceed supply by approximately 2 million barrels per day (bpd), contrast sharply with the present market pessimism.

The Paris-based organization increased its prediction for the world’s oil consumption by 200,000 barrels per day to 102 million barrels per day, saying that China’s rebound following the easing of COVID-19 limitations had outperformed projections with demand hitting a record 16 million barrels per day in March. The first hint from an OPEC official about a likely move as oil prices decline came from Iraq’s oil minister, Hayan Abdel-Ghani, who stated that his country does not anticipate more cutbacks to oil output from OPEC+ at its upcoming meeting in June. “There will be no additional reduction at the next meeting, which will be held on the 3rd and 4th (of June), and as for Iraq, we cannot reduce further,” Abdel-Ghani stated.

Technically market is under fresh selling as the market has witnessed a gain in open interest by 19.25% to settle at 8282 while prices are down -78 rupees, now Crude oil is getting support at 5920 and below the same could see a test of 5884 levels, and resistance is now likely to be seen at 6018, a move above could see prices testing 6080.



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