Crude Oil News Today: Prices Slide as US Stockpiles Grow

Prices Retreat Amid Surging US Stockpiles and Tentative OPEC+ Strategies

Oil prices have decreased in recent trading sessions, influenced by rising crude and fuel inventories in the U.S., indicating weakening demand. This downward trend is further fueled by cautious sentiment ahead of an upcoming OPEC+ policy meeting and revised market forecasts that suggest a move towards equilibrium.

At 10:28 GMT, Light Crude Oil Futures are trading $77.57, down $0.81 or -1.03%.

Rising Inventories and Demand Concerns

Tuesday’s data from the American Petroleum Institute (API) shows an increase in U.S. crude inventories by 509,000 barrels. This trend is also seen in gasoline and distillate stockpiles, highlighting a potential reduction in U.S. fuel demand. This aligns with the global situation, where the Energy Information Administration (EIA) has lowered its growth estimate for 2024 world oil demand to 920,000 barrels per day.

EIA’s Adjusted Production and Price Forecasts

The EIA has updated its projections, predicting a rise in global oil production by 970,000 barrels per day, which surpasses the growth in demand. Consequently, the EIA has adjusted its price forecasts downward, with Brent crude now expected to average $90 per barrel in the third quarter, decreasing to $88.67 in the fourth quarter.

OPEC+ Production Policy Uncertainties

The upcoming OPEC+ meeting on June 1 brings uncertainties, with the current voluntary output cuts set to expire at the end of June. Market expectations are cautious, with potential extensions of cuts depending on whether demand increases.

Short-Term Forecast

The outlook for the oil market in the short term appears bearish, influenced by high inventory levels and downward adjustments in demand projections. With the impending OPEC+ meeting and the possibility of extended production cuts, traders should remain alert to any shifts in policy that could influence market trends. Expect continued volatility and a potential further softening of prices if the current trends persist.

Technical Analysis

All three major trends are decisively lower on Wednesday with today’s sustained move under the 200-day moving average. With the longer-term trend down, sellers have set their sights on a potential support cluster at $75.79 to $74.84.

On the upside, the nearest resistance is the 200-day MA at $78.61. Overtaking this level will indicate a shift in investor sentiment. The move could fuel a short-covering rally.