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Crude Oil News Today: Bullish Traders Eye $80.11 as Breakout Trigger

By:
James Hyerczyk
Updated: Jun 18, 2024, 13:08 GMT+00:00

Key Points:

  • Light crude futures fall as traders establish support at the 50-day moving average, eyeing $80.11 as a trigger for an upside breakout rally
  • Oil prices remain stable with traders anticipating a summer demand surge to boost prices, despite strong supply pressures from global inventories
  • Analysts expect U.S. crude inventories to drop by 2.3 million barrels in the week ending June 14, indicating a potential price rise amidst summer driving season
Crude Oil News Today

In this article:

Light crude oil futures are trading lower on Tuesday as traders aim to establish new support levels after a nearly failed breakout above the 50-day moving average. Market participants are also focusing on the May 20 short-term top at $80.11 as a potential catalyst for upward acceleration.

At 09:38 GMT, Light Crude Oil futures are trading $79.49, down $0.23 or -0.29%.

Stable Prices Amid Demand Hopes and Strong Supply

Oil prices remained largely stable on Tuesday, with traders awaiting indicators of a summer demand surge to bolster prices despite the pressure from robust supply. Benchmark Brent crude futures and U.S. West Texas Intermediate (WTI) crude futures both declined after a significant 2% rise on Monday, which saw them reach their highest levels since April.

Focus on Fundamentals and Inventory Levels

The market’s attention has shifted back to fundamentals, which have been weak for some time. Global crude oil inventories and refined product storage in the United States and Singapore are notably high. Global oil demand growth slowed to 890,000 barrels per day (bpd) year-on-year in Q1, with indications of further deceleration in Q2.

Key U.S. Inventory Data

Analysts predict a 2.3 million barrel decline in U.S. crude inventories for the week ending June 14, based on a Reuters poll. This week’s critical data point is the U.S. oil inventory report, which could either support or challenge the emerging optimism about rising demand at the start of the summer driving season.

OPEC+ Supply Cuts and Demand Outlook

Some analysts remain optimistic about the near-term price impact of potential OPEC+ supply cut extensions. OPEC+ has maintained its 2.25 million bpd demand growth outlook for 2024, highlighting a stagnant oil supply growth and potential production risks in 2025. The disparity between OPEC+’s demand projections and other agencies suggests a challenging environment for maintaining a bearish outlook.

China’s Refinery Output and Interest Rates

In China, oil refinery output fell 1.8% year-on-year in May due to planned maintenance and rising crude costs. Additionally, investors are monitoring U.S. Federal Reserve representatives’ comments on interest rates and potential impacts on U.S. demand later today.

Market Forecast: Bullish Outlook

Given the anticipated drop in U.S. crude inventories, potential OPEC+ supply cuts, and signs of increasing summer demand, the market outlook for crude oil prices is bullish in the short term. The combination of these factors suggests upward pressure on prices, despite the current stabilization phase.

Technical Analysis

Daily Light Crude Oil Futures

The intermedidate trend turned up on Monday when light crude oil futures crossed to the strong side of the 50-day moving average at $79.09. This is new support.

Buyers are now eyeing the May 20 short-term top at $80.11 as a potential trigger point for an acceleration to the upside.

Crossing to the weakside of the 50-day MA could trigger a break into the 200-day moving average at $77.78. This represents long-term support.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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