A surge in crude oil inventories means that crude oil prices on the Brent benchmark could remain capped around $44 as the 4th trading day of the week grinds to a close.
Data from the Energy Information Administration (EIA) shows that US oil stocks rose by 4.3million barrels in the week ended November 6, 2020. This was more than last week’s drawdown of 8million barrels and also exceeded the expectation that there would be a drawdown of 2million barrels. US crude oil imports rose by 470,000 barrels in the week under consideration, compared to the previous week while total refined products supplied over the last 4-week period dropped by more than 10.7%, compared with the same period the previous year.
Crude oil price on the Brent benchmark has gained 1.3% on the day, and is trading at 44.34 as at the time of writing.
Technical Levels to Watch
The risky sentiment that boosted this week’s price action on Brent crude has allowed it to maintain the challenge on the 44.16 resistance line, which has so far held its own against pressure from buyers. Price needs to break this area in order to target the 46.41 resistance (31 August high). Price targets at 48.33 and 50.64 remain elusive at the moment, as they have
been since March 2020.
On the flip side, a rejection at 44.16 with follow-through selling points price towards 42.50. 41.43 and 39.57 remain targets to the south.
Brent Crude Daily Chart