Crude Oil News Today: Near Seven-Week High Amid Middle East Tensions, EIA Data

James Hyerczyk
Updated: Jun 21, 2024, 02:37 GMT+00:00

Key Points:

  • Light crude oil futures are nearly flat, testing a seven-week high, with geopolitical tensions influencing the market.
  • WTI futures for July see subdued trading due to a US holiday; August contracts now lead, Brent edges up on Gaza conflict news.
  • EIA expected to report a 2.8 million barrel draw, with API showing a 2.264 million barrel rise in US crude stocks.
Crude Oil News Today

Light Crude Oil Futures Hold Steady

Light crude oil futures remained nearly flat on Thursday after testing a seven-week high earlier in the session. Investors are weighing geopolitical developments in the Middle East while awaiting crucial US inventory data.

At 09:26 GMT, Light Crude Oil futures are trading $80.06, down $0.05 or -0.06%.

Geopolitical Tensions Impacting Market Sentiment

US West Texas Intermediate (WTI) futures for July, expiring Thursday, saw subdued trading due to a US holiday on Wednesday, resulting in no settlement. The more active August contract is now the leading futures contract. Meanwhile, Brent crude futures edged up as news of Israeli tanks advancing into Gaza impacted early trade.

Israeli troops, supported by tanks, warplanes, and drones, advanced further into the city of Rafah, resulting in eight fatalities, according to residents and Palestinian medics. Markets are concerned that an escalation in the Gaza conflict could disrupt oil supplies from this key producing region.

Inventory Data Awaited Amid Supply Concerns

Despite geopolitical tensions, concerns over an inventory build are currently overshadowing fears of escalating stress. WTI crude prices slipped ahead of the US government’s oil inventories report, delayed by a day due to the national holiday. The Energy Information Administration (EIA) is set to release last week’s oil stocks data at 15:00 GMT, with expectations of a 2.8 million barrel draw.

API Report Highlights Inventory Build

The American Petroleum Institute (API) report, released on Tuesday, indicated that US crude stocks rose by 2.264 million barrels for the week ending June 14, according to market sources. However, gasoline inventories saw a decline, balancing some of the negative sentiment from the crude stock increase.

Analysts Watching EIA Data Closely

“EIA’s weekly oil inventory report will be scoured for any signs of weak demand,” ANZ Research analysts noted on Thursday. Traders are expected to closely analyze the report for indications of demand trends and potential market direction.

Market Forecast

Considering the geopolitical tensions and mixed inventory signals, the market outlook remains cautious. If the EIA report confirms a significant draw in crude stocks, it could support prices and lead to a bullish trend. Conversely, any signs of weak demand could pressure prices downward. Traders should remain vigilant as the situation unfolds.

Overall, the short-term outlook for crude oil is neutral to slightly bullish, contingent on inventory data and geopolitical developments.

Technical Analysis

Daily Light Crude Oil Futures

Light Crude Oil futures are struggling a little to maintain upside momentum on Thursday as traders try to build upon the breakout above the 50-day moving average at $79.06. This indicator is new support.

The daily chart shows there is plenty of room to the upside with the April 26 top at $83.57 the main upside target.

Prices could weaken under the 50-day MA, but the longer-term uptrend will remain intact due to 200-day moving average support at $77.78.

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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