The benchmark oil price increased by nearly 2% on Wednesday, reaching its highest point in three months as the outlook for the commodity remains bullish.
API data showed small oil inventories
The American Petroleum Institute reported that oil inventories in the United States increased by approximately 300,000 barrels in the week ending April 7th. However, a draw of 1.6 million barrels from the Strategic Petroleum Reserve also contributed to this.
Energy Secretary Jennifer Granholm verified, following last week’s ‘rebellion’ by OPEC+, that the United States intends to replenish the Strategic Petroleum Reserve. These are to reach levels seen prior to President Joe Biden’s historic release last year in response to Russia’s invasion of Ukraine.
You may also read: How to invest in silver
The Energy Department “will look to take advantage of prices if it is advantageous to the taxpayer in the rest of the year, but it’s a lot to refill,” Granholm said during remarks at an energy forum held by Columbia University.
More global news impacting the oil price
In another development for oil demand, the International Monetary Fund lowered its global growth forecast for 2023 on Tuesday. The IMF did so citing the impact of rising interest rates.
Don’t miss: Comparison of Barrick Gold Corporation vs. Kinross Gold
On Thursday and Friday, respectively, the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency are scheduled to release their monthly reports on oil demand and supply. Tuesday, the US Energy Information Administration (EIA) said in its most recent Short-Term Energy Outlook (STEO) reduced its forecast for OPEC oil production by 0.5 million barrels per day (bpd) for the remainder of 2023. Its forecast for 2023 global oil demand growth by 40,000 bpd.
Furthermore, the EIA projected that US crude production would increase by approximately 700,000 bpd this year, from 11.88 million bpd to 12.54 million bpd. This was an upward revision of roughly 100,000 bpd from the STEO for the previous month.
More to read: S&P 500 ticks higher ahead of US inflation figures, stays above major
Nonetheless, the authority does not anticipate a significant increase in crude oil prices. In fact, the EIA considers the current price level to be the benchmark’s average for the year.
In this respect, it differs from the majority of investment bank commodity analysts, with Citi and Morgan Stanley being notable exceptions. They anticipate that crude oil will end the year at a lower price than it is now.
US inflation slows but remains high
The US Consumer Price Index (CPI) increased 0.1% in March, following a 0.4% increase in February, the Labor Department reported on Wednesday.
Another interesting topic: Gold is gaining slowly as traders wait for fresh data
In the year leading up to March 31st, the CPI rose by 5%, the smallest year-over-year increase since May 2021. In February, the CPI grew by 6% annually. Oil rose around $1.5 after the data, reaching three-month highs above $82.50.
Oil bulls are on a roll
Oil has surpassed previous highs, affirming the bullish bias. So long as the price remains above $82.20, the short-term outlook appears bullish. The next objective for bulls is the 200-day moving average, which is currently around $83.30.
A rise above the 200-day moving average would reinforce the bullish momentum, alter the long-term outlook to bullish, and likely drive oil prices back above $90 in the near future.
WTI oil 1D chart, source: tradingview.com, author’s analysis
Comments
Post has no comment yet.