US crude oil inventories rise more than expected
US crude oil inventories rise more than expected
After two days of gains, the price of WTI crude turned downward as the American Petroleum Institute (API) reported an increase in US crude oil inventories that exceeded analysts' expectations.
For the week ending October 18, US crude oil inventories rose by 1.643 million barrels, following a decline of 1.58 million barrels the previous week. This marks the third increase in weekly inventories over the past eight weeks, surpassing market expectations of a 0.7 million barrel rise.
On October 23, WTI approached the $70.00 mark, but then rebounded and is currently trading above $71.00.
However, no extraordinary events are expected in the coming days, as markets reassess the outlook for a Federal Reserve rate cut and prepare for the upcoming US presidential elections.Geopolitical developments are also not providing upward momentum for prices. US Secretary of State Antony Blinken, after visiting the Middle East, urged Israel to avoid further escalation of conflict with Iran.
Middle East tensions
Blinken stated that there is a possibility of reaching an agreement for the release of hostages still held by the Hamas group, which could help ease tensions in the region.
Meanwhile, according to the International Energy Agency (IEA), global oil supply fell by 0.64 million barrels per day in September to 102.8 million barrels, due to production halts and export disruptions in Libya, as well as maintenance work at oil fields in Kazakhstan and Norway.
However, these events have not significantly impacted the market due to a global reduction in demand and an increase of 1.5 million barrels per day in supply from non-OPEC+ countries.
If this trend continues, we may see oil retreat to $70.00, with support around $69.40. However, any hint of escalating tensions in the Middle East or around Iran could push prices back up to the strong technical level above $75.00, where the 100-day simple moving average (SMA) and several other key indicators converge.
Overall, WTI is approaching the resistance of $72.05. However, market participants do not expect that the Israel-Iran conflict will cause significant interruptions in oil supply from the Middle East.
