Crude oil prices fell further on Thursday, as the market continued to react to rising US oil stockpiles. Brent Crude was going at $81.03 per barrel at 10.20 GMT, having lost -0.50% in 24 hours. Similarly, West Texas Intermediate (WTI) was at $75.95, down -0.90%. A release by the Energy Information Administration (EIA) on Wednesday showed that US producers held 12.01 million barrels of oil in the week ending February 14, far-exceeding the forecast 3.3 million barrels. Furthermore, the figure also exceeded American Petroleum Institute’s (API) projection of 8.5 million barrels.
Rising stockpiles in the US have solidified perceptions that there could be a glut in the market. Furthermore, China’s economy has slowed down, increasing the likelihood of reduced demand. These factors will likely continue exerting downward pressure on oil prices in the near term.
Oil could lose further ground on Thursday if the US dollar gains following the release of key US economic data, including Initial Jobless Claims. However, the commodity could get some tailwinds from geopolitical developments in the Middle East. Israel is reportedly close to undertaking a ground offensive in the densely populated Rafah City- a move that could precipitate a flare-up in the four-month war.
The delicate Middle East security outlook is further threatened by attacks by Houthi Rebels on ships on the Red Sea. Shipping giant Maersk has issued an advisory, warning that the attacks could spill over into the second half of 2024. Such a development could disrupt supplies, possibly spiking up prices.
Technical analysis
The RSI on the 30-minute WTI crude oil price chart is supportive of further downside action. The commodity will likely pivot at 77.10 and target 75.90 on bearish control. A further loss of momentum could break the first support and possibly touch 75.50. However, pushback by the buyers could build momentum to test the first resistance at 77.55, beyond which 78.10 will be within reach.
WTI Crude oil on 30-minute price chart