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Oil prices consolidated after rising on Tuesday, driven by reports of falling U.S. crude oil and fuel inventories. However, optimism for the latest Chinese economic stimulus faded, which capped further gains.
Picture: Oil prices consolidate on mixed signals, as observed on the VT Markets app.
The market received initial support from the announcement from China on aggressive fiscal measures, including interest rate cuts, aimed at spurring its sluggish economy as the world’s largest crude importer. Still, analysts caution that more is needed to significantly boost confidence.
Meanwhile, U.S. oil stockpiles continue to drop. The American Petroleum Institute (API) reported that U.S. crude stocks fell by 4.34 million barrels, gasoline inventories dropped by 3.44 million barrels, and distillate stocks shrunk by 1.12 million barrels.
This helped provide some stability to the market after oil prices had previously fallen to multi-year lows in early September.
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Geopolitical tensions also added more uncertainty to the market, with escalating conflict between Hezbollah and Israel in the Middle East raising fears of potential disruptions in the region, a critical supplier of global crude oil.
Traders should expect volatile price movements as the market weighs the potential impact of the U.S. Federal Reserve rate changes, ongoing China stimulus measures, and Middle East geopolitical risks.
The $75 per barrel mark for Brent may serve as an important support level in the near term, with prices sensitive to inventory data and geopolitical developments.
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