Crude Oil News Today: Edging Higher on Global Conflicts, EIA Data Awaited

James Hyerczyk
Updated: Apr 3, 2024, 13:21 UTC

Key Points:

  • Ukrainian Strikes on Russian Refineries Stir Oil Market
  • Iran-Israel Conflict Threatens Middle East Oil Supply
  • Anticipation Builds for EIA Report, Expected 300K Drawdown
Crude Oil News Today

In this article:

Geopolitical Tensions Fuel Market Uncertainty

Investors remain cautious as geopolitical tensions escalate. Ukrainian attacks on Russian refineries and the potential for an expanded conflict in the Middle East have heightened concerns over oil supply disruptions. The recent Ukrainian drone strikes targeting Russian oil processing facilities have particularly stirred the market, hinting at possible future supply constraints.

At 10:06 GMT, Light Crude Oil Futures are trading $85.37, up $0.22 or +0.26%.

Middle East Conflict and Supply Risks

The situation in the Middle East is also critical, with growing apprehensions about a broader regional conflict. Iran’s vow for retribution against Israel, following an attack that killed high-ranking military personnel, has investors wary of potential supply interruptions from oil-producing nations involved in these tensions.

Domestic and International Supply Adjustments

In Mexico, Pemex’s request to cancel a significant portion of its crude exports in preparation for domestic processing at the new Dos Bocas refinery signals a notable shift in oil supply dynamics. Meanwhile, Taiwan’s Formosa Petrochemical temporarily halted operations due to a strong earthquake, though it has since resumed, adding a layer of complexity to global supply concerns.

Market Awaits OPEC+ and Inventory Data

The oil market is now focusing on the upcoming OPEC+ ministerial panel, with expectations of maintaining the current output cuts until June. Adding to this, recent American Petroleum Institute (API) data shows a decrease in U.S. crude inventories, suggesting a tighter market. This is in contrast to the significant inventory increase reported the previous week.

Short-Term Market Forecast

Considering these factors, the short-term market outlook appears bullish. The combination of supply disruptions due to geopolitical tensions, strategic inventory movements, and OPEC+’s likely decision to maintain production cuts could continue to push oil prices upward in the near term. Traders should watch for the official data release by the U.S. Energy Information Administration (EIA) for further market direction. It is forecast to show a 300K drawdown.

Technical Analysis

Daily Light Crude Oil Futures

Light crude oil futures are edging higher on Wednesday as traders attempt to extend gains for a fifth straight session with their eyes set on the October 20 top at $89.49. On the downside, the nearest static support is $82.68, followed by the short-term swing bottom at $80.30. A trade through this level will change the short-term trend to down.

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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