US crude oil inventories in the week ended May 28 came in at -5.1million barrels, which exceeded the previous week’s 1.7million barrel shortfall. Market analysts had predicted a shortfall of 1m barrels.
However, crude oil prices were unable to go beyond the intraday high of $71.96 on the Brent benchmark, which now forms the new 2021 high, having toppled the previous level set on March 8.
The OPEC + alliance is meeting to decide on new production levels. Russia’s Deputy Prime Minister Alexander Novak, who until 2020 held the energy ministry portfolio, says that current prices “are good enough for Russia” and that it reflects a balance of demand and supply. He also said that the next meeting would decide the future output strategy for August.
Technical Levels to Watch
Brent crude is testing the 71.44 resistance, following an intraday violation earlier in the day. A break of this level is needed to send crude oil price on this benchmark towards the 73.44 price resistance, which also intersects with the 73.34 resistance level.
On the flip side, a price rejection and a pullback move from the current resistance allow Brent crude to retest the 70.01 support, which also interacts with the channel’s lower border. Further descent in price requires this double support to be taken out, targeting 67.74 initially. Additional targets to the south reside at 66.81 and 65.95, with 64.26 also lining up as a future target.