Key points:
Oil prices edged higher for the third straight session following a sharp drawdown in US crude stockpiles. This rebound comes after Brent and WTI oil prices touched multi-month lows earlier in the week due to recession fears and a global stock selloff.
Picture: Oil prices edged higher after a significant drop in US crude inventories, as observed on the VT Markets app.
The Energy Information Administration (EIA) reported a substantial draw of 3.7 million barrels in US crude inventories, much larger than the anticipated 700,000-barrel draw. This marks the sixth consecutive week of inventory decline, reflecting strong demand or supply constraints. Despite this, US crude production reached a record 13.4 million barrels per day, an increase of 100,000 bpd.
Geopolitical tensions in the Middle East continue to play a crucial role in oil price dynamics. Recent escalations, including the killing of senior members of Hamas and Hezbollah, have raised concerns about potential retaliatory actions by Iran against Israel.
Although no direct supply disruptions have occurred, the threat has led to longer shipping routes and more oil remaining in transit.
The substantial inventory decline suggests a potential for continued upward momentum in oil prices. However, the record production levels and geopolitical uncertainties add layers of complexity. Traders should closely monitor inventory reports, production data, and geopolitical developments to inform their strategies.
Given such volatility in the market, a cautious approach with an eye on both fundamental and technical indicators is advised.
Official partners:
