A rise in crude oil inventories has helped suppress crude oil price on the Brent crude benchmark in Wednesday’s New York session. Brent crude traded is trading at 40.92 as at the time of writing after the Energy Information Administration (EIA) reported a rise in crude oil inventories by 5.7 million barrels last week, which was far above the drop of 1.8m barrels reported for the week earlier. This did not have a bearish effect on crude oil prices, but was enough to suppress any attempts at a price recovery ahead of the FOMC decision.
Crude oil price continues to trade below $45 a barrel as demand for the product remains at historic lows. OPEC + also failed to deliver the required extensions that had been projected. OPEC’s actions have been the driver of prices in the last 6 weeks, and the decision to abandon voluntary output cuts as well as an extension of just one month to existing cuts have not helped the bulls.
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Outlook for Brent Crude
Right at the 41.43 resistance line, a dark cloud cover candlestick pattern was formed by the candles of Friday and Monday. Price action has remained mellow as markets await further direction from the FOMC. Price is expected to retest the 41.43 resistance, and only a clear break of this area allows Brent crude to target 44.16. Above this target, 48.33 remains the sole barrier before the 50.64 price level beckons.
Rejection at 41.43, on the back of the technical pattern allows crude oil price on the Brent to approach 38.56 and 31.69, in that order. Multi-year lows of 28.38 and 24.68 continue to remain relevant on the back of low demand push for the black gold.
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