Crude oil inventories were lower than expected for the 3rd week in a row, on the back of improved refining activity and reduced crude oil production, according to data from the US Energy Information Administration (EIA).
Inventories fell by 4.5 million barrels as crude oil production dropped more than 300,000 barrels a day. This figure was more than the 3.5 million barrels drop that analysts had predicted. This figure was less than the drop of 7.5 million barrels seen last week.
The Organization of Petroleum Exporting Countries (OPEC) released its monthly report earlier today. The oil cartel forecast a drop in global oil demand by 9.06 million barrels per day for the rest of 2020. The latest figures are slightly higher than the one provided in the previous month’s report, and mirrors the cartel’s fears that renewed spikes in coronavirus cases could continue to impact prices by shutting down demand and swelling oil inventories globally.
Crude oil price on the Brent crude benchmark is up on the day by 1.73%, trading at 45.26 as at the time of writing. However, the asset continues to trade in a range, reigned in by the 45.39 resistance level.
Outlook for Crude Oil Price
This week’s price action continues to trend sideways, with 45.39 continuing to remain as the upper barrier to beat. A breakout above this level is required to send Brent crude towards the 48.33 resistance, with 50.64 continuing to remain an elusive target in the near-term.
41.43 is the downside target located below this range and a breakdown of the range’s lower limit at 44.16 is required to send crude oil price towards this target. 38.56 and 35.61 remain targets to the south, as crude oil price awaits further direction.
Crude Oil Price Chart (Brent; daily)