CRUDEOIL Analysis
Afternoon: Crude Oil Futures Edge Higher Amid Geopolitical Tensions and Rising US Inventories
Highlights:
- Geopolitical tensions in Ukraine and the Middle East support crude oil prices amid supply disruption fears.
- U.S. crude and gasoline inventories rise more than expected, signaling potential market oversupply.
- Key economic data, including U.S. unemployment claims and Euro Zone consumer confidence, could impact demand outlook.
Overview:
Crude oil futures climbed above $69 per barrel as geopolitical risks continued to dominate market sentiment, overshadowing concerns about rising U.S. crude inventories. Escalating tensions in Eastern Europe and the Middle East have renewed fears of supply disruptions, supporting oil prices in the short term.
Geopolitical Factors Boost Prices
Ukraine's repeated use of Western-supplied long-range weapons raised the stakes in the conflict with Russia, following President Vladimir Putin’s approval of an updated nuclear doctrine expanding the use cases for nuclear weapons. This escalation added to market anxieties about potential disruptions in global energy supply chains. Meanwhile, the U.S. vetoed a UN resolution calling for a Gaza ceasefire, intensifying concerns over the stability of the Middle East, a key region for crude production and exports.
Rising U.S. Crude Inventories Cap Gains
The rally in crude oil was tempered by signs of an oversupplied market. According to the EIA, U.S. crude oil inventories increased for the third consecutive week, rising by 0.5 million barrels last week, surpassing the anticipated 0.4 million-barrel build. Additionally, gasoline inventories climbed by 2.1 million barrels, well above the 1.6 million-barrel expectation, signaling weak domestic demand.
Economic Data Outlook
Market participants are now turning their attention to key economic data releases, including Euro Zone Consumer Confidence, U.S. Unemployment Claims, the Philly Fed Manufacturing Index, and Existing Home Sales, to assess their impact on demand expectations.
Action Plan
Traders are advised to buy on dips around $68.60, targeting $70, with a stop loss set below $67.80.
Support and Resistance Levels:
