- Oil prices are rising due to a significant decrease in US oil inventories, exceeding expectations.
- The CCP’s third plenum could impact oil prices depending on its policy decisions.
- Support and resistance levels are identified.
Most Read: S&P 500, Nasdaq 100 Slide as US Threatens Stricter Restrictions on Chinese Trade
Oil prices are on the offensive this afternoon following US inventories data. In its weekly survey released on Tuesday, the American Petroleum Institute reported that U.S. oil inventories declined by 4.4 million barrels last week. This marks the third consecutive weekly decrease and significantly exceeds the consensus estimate of a 33000-barrel drop, as per a Reuters poll.
The Energy and Information Administration (EIA) released its data a short while ago and the story was pretty similar. EIA data had inventories falling by 4.9 million barrels as opposed to the API number and even more staggering compared to estimates of a 33000 barrel drop.
US EIA Weekly Crude Inventories
Source: Refinitiv (click to enlarge)
This is a welcome sign for oil traders following the concerning data out of China earlier in the week. Comments today around tighter trade restriction by the US also threatens to affect global trade and could by extension affect oil sales as well.
The CCP, China’s ruling party is staging its third plenum, where key policy decisions are being discussed. Market participants will no doubt be hoping for a concrete plan on boosting growth and addressing concerns of market participants around the globe.
Technical Analysis
Oil prices are on course to snap a 3-day losing streak while price remains trapped between the 100 and 200-day MAs. Inventories data proving to be the catalyst today, now whether that is able to keep oil prices at these levels remains to be seen.
A break above the 100-day MA brings resistance at 86.200 into focus with the next resistance resting at 87.900. There is a very good chance that oil prices could remain trapped between the 100 and 200-day MAs.
Support
- 83.50 (200-day MA)
- 83.00
- 81.58
Resistance
Brent Crude Oil Daily Chart, July 17, 2024
Source: TradingView.com (click to enlarge)
Follow Zain on Twitter/X for Additional Market News and Insights @zvawda
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.