Rising demand outlook and a less-than-expected drop in US crude oil inventories are factors supporting crude oil prices in Wednesday’s New York session.
Crude oil price on the Brent crude benchmark rose for the 3rd straight day after US crude oil inventories fell by 400,000 barrels for the week ended May 7, 2021. This figure was less than the projected drop of 2.1million barrels and much lower than last week’s massive slump of 8.1 million barrels.
As a result, crude oil price on the Brent crude benchmark edged higher by 1.46% as of the time of writing and continues to attract bids. A barrel currently trades at $69.69.
The lower-than-expected drop in crude oil stocks came on the back of reduced utilization by US refineries. US crude oil refinery inputs averaged 15.0 million barrels per day, which came to an average consumption of 223,000 barrels per day less than the previous week’s average.
Imports also rose by 37,000 barrels per day more from the previous week to help close the shortfall.
Technical Outlook for Brent Crude
The daily chart shows that price continues to trade within the bearish flag’s consolidation area. The stage looks set for the price to challenge the 70.01 psychological resistance. A break of this price level allows the bulls to aim for the 71.44 resistance, site of the upper border of the consolidation area. A further advance towards 73.34 breaks the upper border and invalidates the pattern.
On the flip side, a rejection at 70.01 or 71.44 allows the price to resume the downward leg of the price oscillation within the flag, aiming to shred the 67.74 support en route to a challenge of the flag’s lower border. A breakdown here completes the resolution of the bearish flag, targeting a price completion at 60.07. This completion move would have to take out 65.95, 64.26, and 62.21 along the way.