Oil Bulls’ Morale High On Supply Squeeze
Government data showed the U.S. crude inventories have shrunk more than expected, and demand for oil may be higher as vaccination campaigns expand. Prices rose over $2 a barrel on Wednesday.
Crude oil stocks in the world’s most powerful economy fell to their lowest level since September 2019, U.S. Several refineries and offshore drilling rigs were shut down in late August due to Hurricane Ida, according to the Energy Information Administration.
Moreover, as the price moves organized inside the bullish channel on the chart, getting continuous support from the Exponential Moving Average 50, we expect to reach new gains of up to 75.00 as the crude oil price approaches 73.30 level today.
At one point during the session, Brent hit a contract at an outright high of $76 a barrel.
For the short and medium-term, the bullish trend will remain dominant, and it is vital to maintain $72.50 a barrel in order to achieve the suggested targets.
Traders are expecting today’s trading range to be between $72 resistance and $74.50 support.
In the aftermath of Hurricane Ida, oil production in the Gulf of Mexico is still struggling to fully resume as of late August
As expected, despite declining inventories of crude oil and distillate last week, gasoline stocks also drifted lower, but not as much as analysts anticipated.
As a result, crude stockpiles fell by 6.4 million barrels last week, whereas analysts anticipated a 3.5-million-barrel drop.
In Texas, refineries are operating organically despite Tropical Storm Nicholas’ slow passage across the Gulf Coast yesterday.
Several refineries on the Gulf Coast were knocked offline by Ida two weeks ago.
In addition to price support, the International Energy Agency (IEA) projected that vaccine roll-outs will contribute to recovery after a three-month decline in global oil demand caused by the spread of the Delta variant and re-imposed pandemic restrictions