Crude oil prices dropped -0.83% to 6546 yesterday as the price of oil was affected by waning concerns about a more protracted conflict in the Middle East, evidence of rising US crude supply, and growing doubts about the outlook for demand.
This week, Egypt led efforts to revive the peace negotiations between Israel and Hamas that had reached a standstill. The United States Secretary of State Antony Blinken urged Hamas to accept Israel’s offer of a ceasefire in exchange for hostages.
The Energy Information Administration revealed last week that while distillate stockpiles decreased. Crude oil and petrol inventories in the United States rose.
In the week ending April 26, the EIA reported that crude stocks rose by 7.3 million barrels to 460.9 million barrels. At the delivery hub in Cushing, Oklahoma, crude inventories rose by 1.1 million barrels.
The outlook for global demand was further cloud by low expectations for interest rate reductions by the US Federal Reserve. In the meantime, OPEC+ hinted that if oil demand does not rebound. It may continue its voluntary production curbs of 2.2 million bpd past June.
United States commercial crude oil stockpiles reached a record high of 460.9 million barrels in the week ending April 26, up 7.3 million barrels from the previous week. According to the Energy Information Administration. This is the highest level since June 2023.
The market is technically in a long liquidation since prices have dropped by -55 rupees and open interest has decreased by -1.17% to settle at 12678.
Crude oil prices is currently finding support at 6508; a move below could see prices test 6470 levels. On the other hand, a move above could see prices test 6686. Resistance is now likely to be seen at 6616.