Crude oil prices rose 1.21% to 6253, boosted by a Chinese fiscal stimulus a package or geopolitical tensions. The announcement by the Chinese central bank to lower the reserve requirement ratio starting on February 5 as a means of supporting the fragile economic recovery has caused oil prices to rise.
Further bolstering the market was a 6.67 million barrel drop in United States crude stocks for the week ending January 19, as disclosed by the American Petroleum Institute.
The optimistic outlook was, however, dampened by worries about weak demand and a 7.2 million barrel rise in petrol inventories. An even stronger dollar presented a problem for oil prices. The International Energy Agency (IEA) increased its prediction for the growth of oil demand in 2024 by 1.24 million barrels per day.
Despite being the third revision to the upward side. This is still a lot less than OPEC’s 2.25 million bpd estimate. The IEA put the revision down to stronger global economic expansion, lower fourth-quarter crude prices, and China’s growing petrochemicals industry.
Technically, there is new buying in the market as open interest increased by 0.62% to close at 11216. Support for crude oil prices is at 6172, and a test of 6090 is possible. Resistance is probably at 6324.
Testing 6394 could result from a move above. For a thorough grasp of market dynamics, traders should keep an eye on geopolitical events, inventory data, and global economic developments.