NEW DELHI: Crude oil prices decreased by 0.72% to settle at 6,579, reflecting a market sentiment that does not currently foresee significant disruptions to oil supply. Recent data from the US EIA revealed a second consecutive weekly decline in US crude stockpiles, falling by 2.508 million barrels and surpassing expectations of a 1.362 million barrel draw. This decline in inventories indicates a tightening supply, which typically supports prices.
April data indicating a slowdown in US consumer inflation has fueled expectations of Federal Reserve rate cuts, which could stimulate economic growth and subsequently increase energy demand. Despite this potential boost, the IEA has lowered its global demand growth forecast for 2024 by 140,000 barrels per day to 1.1 million barrels per day.
This adjustment suggests a more subdued outlook for oil demand growth. The Organization of the Petroleum Exporting Countries (OPEC) reported that member nations exceeded their production caps by 568,000 barrels per day in April. Despite this, OPEC maintains robust demand forecasts of 2.25 million barrels per day in 2024 and 1.85 million barrels per day in 2025, indicating confidence in future demand growth. The EIA also noted an expected rise in US oil output from top shale-producing regions, projected to reach 9.85 million barrels per day in June, marking the highest level in six months.
Technically, the crude oil market is experiencing fresh selling pressure, with a notable 19.54% increase in open interest to 5,562, while prices declined by 48 rupees. Currently, crude oil finds support at 6,538, and a fall below this level could see a test of 6,497. On the upside, resistance is expected at 6,651, and a move above this level could push prices towards 6,723.
Agencies