Crude Oil News Today: Underpinned by Geopolitical Tensions, US Stock Build

Oil Steady Amid U.S. Stock Build and War Jitters

Oil prices remained stable on Wednesday, hovering near their highest levels in seven weeks. The market is currently balancing concerns over escalating geopolitical conflicts against demand worries following an unexpected increase in U.S. crude inventories.

At 10:10 GMT, Light Crude Oil futures are trading $80.55, down $0.16 or -0.20%.

U.S. Crude Inventory Data

U.S. crude stocks increased by 2.264 million barrels for the week ending June 14, according to figures from the American Petroleum Institute (API). This rise contrasts with analyst expectations of a 2.2 million barrel draw. Gasoline inventories fell by 1.077 million barrels, while distillate stocks rose by 538,000 barrels. The official data from the Energy Information Administration is expected at 1500 GMT, which may further influence market sentiment.

Geopolitical Tensions and Supply Risks

Both oil benchmarks gained over $1 in the previous session after a Ukrainian drone strike caused a fire at a major Russian oil terminal. Additionally, tensions in the Middle East are contributing to supply concerns. Israeli Foreign Minister Israel Katz warned of a potential “all out war” with Lebanon’s Hezbollah, highlighting the risk of supply disruptions in this key oil-producing region.

Economic Data and Market Reactions

Despite these geopolitical tensions, the market has also had to contend with mixed economic signals. Weak U.S. retail sales and varied economic data from China have introduced some uncertainty. However, China’s retail sales showed their fastest growth since February, providing some positive economic indicators that may support oil demand.

OPEC’s Optimistic Outlook

OPEC maintained its forecast for strong growth in global oil demand for 2024 and 2025, anticipating increases of 2.25 million bpd and 1.85 million bpd respectively. The organization also raised its economic growth forecasts for both years, suggesting further upside potential. OPEC’s robust demand forecast is higher than that of the International Energy Agency (IEA), which is set to update its predictions soon.

Market Forecast: Bullish Outlook

Given the current geopolitical tensions and the supportive demand outlook from OPEC, oil prices are likely to remain well-supported in the near term. The combination of supply risks from potential conflicts and strong demand forecasts suggests a bullish outlook for oil prices. Traders should monitor the upcoming U.S. inventory data and ongoing geopolitical developments, as these will be key drivers for market movements in the coming weeks.

Technical Analysis

Light crude oil futures are lower on Wednesday in a somewhat muted trade due to a U.S. bank holiday. Nonetheless, there is some upside momentum present with the U.S. benchmark trading on the strong side of a short-term pivot at $79.16 and the 50-day moving average at $79.05. Additionally, the market crossed to the bullish side of the last swing top at $80.11.

Looking at the daily chart, one can conclude that the way of least resistance is up with near-term targets at $83.57 and $86.64. All this is likely, provided the 50-day MA holds as support.