Crude oil prices have risen in the late morning European session after a price adjustment news by Saudi Arabia and news of a decline in US stockpiles. Brent crude was up by 52 cents and traded at $82.56 per barrel, while West Texas Intermediate (WTI) exchanged at $78.81, having gained 72 cents. The commodity’s resilience has been evidenced by its pushback against gloomy demand forecasts, and some analysts are now convinced that 2024 could yet turn out to be a good year for crude oil.
On Tuesday, American Petroleum Institute (API) reported the first weekly decline in US crude oil inventories since February 6th. The API figures showed a decline in the stockpiles to 0.423 million barrels, far below the forecast figure of 2.6 million barrels. This will help support prices ahead of Wednesday release of the official government figures by the Energy Information Administration (EIA). The market consensus forecasts the EIA figure to show a decline to 2.4 million barrels, from the previous week’s 4.19 million barrels.
Oil prices had already received a boost from a decision by OPEC+ to extend its voluntary cuts of 2.2 million barrels per day through the second quarter of the year. The latest support for crude oil prices has come from news that Saudi Arabia has raised prices of its Arab Light grade crude for its Asian buyers. OPEC+’s largest producer has raised the prices by $0.20 per barrel above the Oman/Dubai average.
Also, crude oil prices will likely rise as the US dollar continues to weaken. The DXY index, which measures the dollar’s strength against six other major currencies, has lost in each of the past three trading sessions, and is down by 0.16% as of this writing. A weak dollar typically drives up demand for dollar-denominated crude oil, helping push up prices.
Technical analysis
WTI price has established a pivot at 78.30, with the bulls in control. This sets the stage for momentum buildup to attempt breaking the resistance at 79.45. Extended control by the buyers could break the first resistance, with the next one likely to come at 79.80. However, if the nears manage to dominate the market below the pivot price, the momentum could favour them. That could breach the 77.80 support, and push the next target to 77.50.
