Crude Oil News Today: US Inventory Data and Geopolitical Risks in Focus

Oil Prices Stabilize Amid Supply-Demand Concerns

Oil prices steadied on Tuesday after two days of decline, as traders weighed expectations of plentiful supply against weak demand. The market largely ignored recent political developments in the United States, focusing instead on fundamental factors.

At 09:22 GMT, Light Crude Oil Futures are trading $78.59, up $0.19 or +0.24%.

Supply-Demand Outlook

Morgan Stanley analysts project the oil market to balance by the fourth quarter, potentially shifting to a surplus by 2025. This outlook suggests Brent prices could drop to the mid-to-high $70s per barrel range. Priyanka Sachdeva, senior market analyst at Phillip Nova, noted that any price upticks were likely due to market consolidation and dip buying.

US Inventory Data in Focus

Traders are eagerly awaiting US oil inventory data. The American Petroleum Institute (API) will release its estimates on Tuesday, followed by official government figures on Wednesday. A Reuters poll suggests US crude stocks may have fallen by 2.5 million barrels in the week ending July 19, with gasoline stocks potentially dropping by 500,000 barrels.

Geopolitical Factors

A Ukrainian drone attack damaged Russia’s largest Black Sea oil refinery in Tuapse overnight. While the extent of the damage remains unclear, ING market strategists suggest that further strikes on Russian refineries could support refined product prices while potentially increasing crude oil availability for export.

Recent Market Performance

On Monday, oil prices hit their lowest levels in over a month. Brent crude futures settled at $82.40 per barrel, while US West Texas Intermediate crude futures for August delivery expired at $79.78 a barrel. Traders seemed to brush off escalating tensions in the Middle East, focusing instead on weak technical outlooks and soft demand.

Market Forecast

The short-term outlook for oil prices remains bearish. With ample inventories and soft demand signals, prices may continue to face downward pressure. However, geopolitical tensions and potential supply disruptions could provide some support. Traders should closely monitor US inventory data and further developments in the Middle East for potential price catalysts.

Technical Analysis

Light crude oil futures are hovering just above the key support cluster formed by the 50-day moving average at $77.98 and the 50% level at $77.75. Traders reaction to this area should set the tone into the close.

A sustained move over $77.98 will indicate the presence of buyers. This could lift the market toward Fibonacci resistance at $79.42. If $77.75 fails then look for the weakness to extend into another pivot at $76.89.