May 21, 2024 22:56 GMT
Crude Focus On Fundamentals, US Stock Build Reported
OIL
Oil sold off on demand concerns and signs that the market is easing but prices remained in recent ranges. The Brent prompt spread has narrowed to only 10c signalling supply outweighing demand, according to Bloomberg. The greenback strengthened briefly following Fed Waller’s comments. The USD index is up 0.1%.
- WTI fell 1.4% to $78.22 and has started today’s trading around this level. It fell to a low of $77.65/bbl before recovering. The benchmark is now down 3.8% in May. Short-term gains are seen as corrective and holding below the 50-day EMA signals the potential for a deeper correction. Initial support is at $76.36, May 15 low, while resistance is at $80.90, May 1 high.
- Brent is also down 1.4% at $82.53/bbl to be 4.4% lower this month. It made an intraday low of $82.04 finding support at $82. Conditions remain bearish with initial support at $81.05, May 15 low. The bull trigger is at $91.18, April 12 high.
- Prices took another step down on reports that US crude stocks rose last week. Bloomberg reported that oil rose 2.5mn barrels and gasoline 2.1mn but there was a distillate drawdown of 300k, according to people familiar with the API data. The official EIA numbers are released later today.
- The US government will sell 1mn barrels of its gasoline reserve to bring down costs for the summer driving season. But commentators don’t believe it will make a material difference as demand far exceeds that each day.
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