Demand concerns from Europe have overcome a slight drawdown of US crude oil stocks, keeping crude oil prices below $70 this Wednesday.
The International Energy Agency (IEA) has forecast that demand for crude oil may not reach pre-pandemic levels until 2023, in its latest demand outlook report. Most of the demand concerns are now coming from Europe, where the cessation of chaotic coronavirus vaccination schedules and rising coronavirus cases continue to suppress industrial activity and enhanced crude oil demand.
No less than 20 countries have suspended the vaccinations using AstraZeneca’s vaccine. Italy and France are planning tougher restrictions, with the former planning a nationwide Easter lockdown. Both countries along with Germany, Norway, Denmark and several more have suspended the use of AstraZeneca’s vaccine, citing safety concerns.
The Energy Information Administration (EIA) says that crude oil stocks in the US came in at 2.4m barrels for the week ended March 12, 2021. This was less than the forecast of 2.8m and the previous figure of 13.8m.
The marginal drop in inventories was offset by demand worries from Europe, leading to a 1.1% fall in crude oil price on the Brent benchmark.
Technical Levels to Watch
Declining tops on the Brent crude benchmark are pressurizing the 67.74 support level. A breakdown of this level allows bears to target the 66.81 level, with 65.95 and 64.26 serving as additional support levels.
On the other hand, bulls need a bounce on 67.74 to allow for 70.01 to come under attack once more. A break above this psychological resistance opens the door towards 71.44, with 73.34 and 75.52 lining up as additional upside targets.