Rising U.S Oil Stockpiles Send Oil Prices Tumbling
Oil prices plunged to their lowest level in two weeks on Thursday after Iran said talks on its nuclear program would resume by the end of November. U.S. crude inventories rose far more than expected, as well.
According to the U.S. Energy Department, crude oil stocks rose by 4.3 million barrels last week, more than twice as much as analysts expected.
In addition to a rise in crude oil imports, refinery processing also slowed, contributing to the large stock build.
The rise in cases in western Europe and the outbreak of COVID19 infections in China weighed on prices. Moreover, the threat of lockdowns in Russia and the record deaths in China also weighed on prices.
Brent crude fell more than 1% to $83.51 a barrel after hitting a two-week low of $82.32 earlier and falling by 2.1% in the previous session.
U.S Oil prices slipped from the $82.85 level sharply and approached the bullish channel’s support line, having earlier touched a two-week low of $80.6 and thus dropped by 2.4%.
In the near term, it appears to be on its way to reaching the expected bearish correction for the rise that started from $62 a barrel price band, aimed to test $79.83 levels. Breaking this level will extend the bearish wave to $76.40 levels.
In the upcoming sessions, a bearish bias will be suggested, noting that a breach above $82.55 will stop the expected negative pressure and lead the price back to the main bullish direction.
Ali Bagheri Kani, Iran’s leading nuclear negotiator, said on Wednesday that his country’s talks with six world powers to resurrect a 2015 nuclear deal will resume by the end of November.
An agreement could pave the way for the lifting of harsh sanctions imposed on Iran’s oil exports in late 2018 by former U.S. President Donald Trump.
There is still a long way to go before an agreement is reached and Iranian oil exports can resume, even if the talks resume and are successful.