Crude Oil Analysis
Afternoon: Crude Oil Slips Below $72 Amid Rising US Stockpiles & Global Supply Uncertainty
Highlights:
- US crude stockpiles rose by over 9 million barrels, significantly surpassing forecasts, fueling oversupply concerns.
- Global oil supply disruptions persist due to the Ukrainian drone strike on Kazakhstan’s exports and ongoing OPEC+ policy uncertainty.
- Diplomatic talks between the US and Russia over Ukraine create geopolitical uncertainty, while Kurdistan’s oil export resumption remains unconfirmed.
Overview:
Crude oil prices declined below $72 following a significant build in US crude inventories, adding to concerns about oversupply in the market. According to API (American Petroleum Institute) data, US oil stockpiles surged by over 9 million barrels last week, surpassing the expected 2.8 million barrel increase. If confirmed by the EIA's official report, this would mark the fourth consecutive week of inventory builds, indicating a slowing demand for crude in the world’s largest economy.
While US stockpiles increased, global supply disruptions persisted. A Ukrainian drone strike on Russian energy infrastructure disrupted Kazakhstan’s oil exports, fueling concerns about transit bottlenecks. At the same time, the G7 is considering raising Russia's oil price cap, which could impact the flow of Russian crude in the global market.
Uncertainty also looms over OPEC+ production policy, as traders await clarity on whether the group will extend or ease output restrictions in April. Diplomatic discussions between the US and Russia on the Ukraine war further influenced sentiment, though Kyiv's exclusion from negotiations sparked concerns over delays in any potential resolution. Meanwhile, the possibility of Kurdistan resuming oil exports this week remains in question, as Turkey has yet to confirm flow resumption to the Ceyhan hub.
Market Sentiment & Technical Outlook
Despite supply-side uncertainties, rising US stockpiles and cautious global demand expectations have put downward pressure on oil prices. Traders are closely monitoring the US Energy Information Administration (EIA) report, which could confirm another week of rising crude inventories, further weighing on oil prices.
Technical Analysis & Trade Strategy
- Support: $70.40 | Resistance: $73.20
- MCX Support: ₹6,160 | MCX Resistance: ₹6,420
- Action: Sell on price jumps around $72, targeting $70.80, with stop loss above $73
Key Economic Data to Watch
- Euro Zone: German PPI m/m
- US Zone: Unemployment Claims, Philly Fed Manufacturing Index, CB Leading Index m/m, Crude Oil Inventories
Support and Resistance Levels:
