Crude oil prices rose in early European trading session on Thursday, as the market reacted to a favourable demand outlook. WTI traded at $80.00, per barrel after gaining 0.35%, while Brent crude stood at $84.30, having risen by 0.45% at press time. The commodity has received tailwinds that will likely keep it on the ascending trajectory as the market awaits the International Energy Agency report.
The latest boost on oil price results from Energy Information Agency (EIA) weekly report that showed a significant drop in the inventories held by US producers. The stockpile reading fell from the previous week’s increase of 1.367 million barrels to a decline of 1.536 million. Furthermore, that was lower than the consensus forecast which had projected increase of 900k barrels for the week ending March 8.
On Tuesday, OPEC released its monthly report, which maintained its estimated increase in daily demand at 2.25 million barrels. In addition, OPEC expects a 2.8% growth of the global economy in 2024 to keep prices stable.
Meanwhile, dollar-denominated oil could also get support from the depreciation of the US dollar. The dollar currently trades near two-month lows against other major world currencies, as depicted by the DXY index, which currently stands at 102.84. A weaker dollar makes it cheaper to buy oil, thus propping up the commodity’s demand. Oil has, however, lost the geopolitical premium in recent days, as the Israel-Hamas war has largely cooled down. Also, attacks by Houthi Rebels on Red Sea cargo ships have done little to disrupt the supply lines.
Technical analysis
WTI crude price has its pivot at 79.20, and the buyers are currently in control. That will likely see them breach the resistance at 80.30 and build momentum to advance further to 80.65 in extension. However, a slide below 79.20 could surrender control to the sellers, with the support at 78.70. Further control by the sellers beyond that point will break that support and possibly test 78.20.
