Crude oil prices rose 2.87%, settling at 6307, as renewed tensions in the Middle East heightened concerns about supply disruptions. The prospect of additional U.S. military action against Iranian forces, along with Israeli Prime Minister Benjamin Netanyahu’s rejection of a ceasefire offer from Hamas, increased geopolitical risks.
In terms of demand, official data showed that U.S. petrol inventories fell by a significant 3.15 million barrels, exceeding the 140,000 barrel prediction.
The market had anticipated a build of 1.895 million barrels, but U.S. crude stockpiles rose by 5.5 million barrels.
The EIA predicted that production of crude oil would increase to 13.21 million barrels per day in 2024. A decrease of 120,000 barrels per day from previous projections.
January’s 12.6 million barrels of oil produced in United States was a decrease from the previous year due in part to shutdowns caused by cold weather in major oil-producing states like North Dakota.
Technically, the market saw short covering as open interest dropped by 2.13%, resulting in a settlement at 10106. Right now, 6174 is providing support for crude oil prices. And a breach below that could send it testing 6040 levels.
Prices may test 6452 if they move above the expected resistance level of 6380. The interplay of demand-supply dynamics, production projections. And geopolitical tensions highlights the intricacy of factors impacting the price of crude oil.