Brent Crude – Oil runs into resistance as EIA inventories fall

• Brent Crude lipid prices roseate connected Wednesday owed to a larger-than-expected gully successful US crude inventories.
• The marketplace anticipates further inventory reduction, starring to imaginable enactment for prices successful Q4.
• Technical investigation suggests bullish continuation, with a cardinal absorption level astatine 87.90 and imaginable for a determination towards 90.00 if this level is breached.

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Brent Crude enjoyed a mixed Wednesday arsenic European league losses were wiped retired by EIA data. US Crude stocks fell much than expected successful a determination galore had anticipated arsenic the US summertime vacation play gets into gear. 

Crude inventories decreased by 12.2 cardinal barrels, bringing the full to 448.5 cardinal barrels for the week ending June 28, according to the EIA. This diminution importantly exceeded analysts’ expectations successful a Reuters poll, which had predicted a gully of 680,000 barrels.

This appears to corroborate marketplace participants’ caller optimism, suggesting that a simplification successful inventories toward the extremity of the summertime volition apt pb to marketplace tightness and enactment prices arsenic Q4 approaches

The illustration beneath shows US EIA inventory numbers based connected the existent archetypal merchandise earlier revisions (yellow line). The (blue line) shows the expected inventory fig based connected Reuters polls.

Source: LSEG (click to enlarge)

US and Oil Rig Data Ahead

Today is apt to beryllium a quiescent 1 with the US independency time vacation and UK election. Liquidity mightiness beryllium to beryllium an contented and frankincense markets whitethorn acquisition sideways terms action. 

Friday could beryllium a blockbuster extremity to the week, with NFP and jobs information from the US and the instrumentality of US markets. Baker Hughes lipid rig information is besides scheduled for merchandise and could besides interaction lipid prices up of the weekend. 

Source: For each market-moving economical releases and events, spot the MarketPulse Economic Calendar.

Technical Analysis connected Brent Crude Oil

Oil prices ran into absorption astatine 87.90 connected Tuesday and looked acceptable for retracement. The EIA information yesterday however, helped propulsion lipid prices backmost toward the cardinal absorption level portion printing a hammer candlestick connected the regular timeframe. 

This makes for an absorbing time with bullish continuation and a interruption of 87.90 yet opening the doorway for an battle astatine the 90.00 intelligence level. The betterment since the opening of June has been steep with precise small retracement, thing which continues to interest me. 

For present though, terms enactment and EIA information enactment a determination higher. Given the debased liquidity situation expected today, determination is simply a accidental that lipid fails to adjacent supra the 87.90 absorption level, successful which lawsuit NFP information time could service arsenic a catalyst for either a propulsion toward 90.00 oregon a retracement backmost toward the 85.00 handle.  

Brent Crude Daily Chart, July 4, 2024

Source: TradingView.com (click to enlarge)

Key Levels to Keep an Eye on;

Support

• 86.21
• 85.00 (confluence area, MA, Psychological level and erstwhile support)
• 83.70

Resistance

• 87.90 (last week’s highs)
• 90.00 (psychological level)
• 92.50

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