December 27, 2024
New Delhi, India
Crude oil prices
Crude oil prices displayed resilience, inching towards a weekly gain after positive revisions in China’s GDP forecasts bolstered demand optimism. At the time of writing, Brent crude traded at $73.61 per barrel, while West Texas Intermediate (WTI) stood at $70.03 per barrel, reflecting renewed market sentiment.
Key Drivers of Price Movements:
- China’s Economic Growth Revisions:
- The World Bank raised its GDP forecast for China for 2023 and 2024.
- China’s own upward revision to 2023 GDP growth by 2.7% further lifted hopes for increased crude demand.
- U.S. Oil Inventory Data:
- The American Petroleum Institute (API) reported a 3.2 million barrel draw in crude inventories, signaling robust U.S. demand.
- However, the Energy Information Administration (EIA) data revealed a smaller-than-expected draw of 934,000 barrels, tempering market expectations.
- Broader Market Dynamics:
- Unmet expectations of OPEC+ increasing oil supply and a lack of supply disruptions despite geopolitical tensions in the Middle East have capped price gains.
- Rising gasoline stocks (+2.348 million barrels) and declining distillate stocks added complexity to the supply-demand outlook.
Market Outlook:
- Annual Trends: Crude benchmarks are set to close the year with modest losses, reflecting persistent bearish sentiment driven by uncertainties around Chinese demand and oversupply concerns.
- OPEC+ and Global Demand Forecasts:
- OPEC+ cut its 2024 oil demand growth forecast for the fifth time.
- The U.S. EIA reduced its global demand growth estimate to 1.2 million barrels per day for 2024, citing weakened economic activity in China and North America.
Technical Levels to Watch:
- Support: Prices hold at ₹5,944, with a break likely testing ₹5,913.
- Resistance: On the upside, ₹6,028 remains a critical level; surpassing this could push prices towards ₹6,081.
Despite fresh selling pressure and rising open interest, crude oil prices are finding stability in key support zones, with market focus now on macroeconomic cues and inventory reports for direction.
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