As the premier investment manager and financial market journalist, I bring you the latest insights on the surge in oil prices that are making waves in the market. Oil prices are soaring due to a remarkable decrease in US oil inventories, surpassing all expectations.
The recent report from the American Petroleum Institute revealed that US oil inventories plummeted by 4.4 million barrels last week, marking the third consecutive weekly decline. This figure far exceeded the consensus estimate of a mere 33,000-barrel drop, as reported by a Reuters poll. The Energy and Information Administration (EIA) also released its data, showing a similar trend with inventories falling by 4.9 million barrels.
This positive news comes amidst concerns over China’s economic data and the ongoing CCP’s third plenum, where crucial policy decisions are being deliberated. The outcome of these discussions could have a significant impact on oil prices as well as global trade.
In terms of technical analysis, oil prices are poised to break a 3-day losing streak, with the 100 and 200-day moving averages playing a crucial role. A break above the 100-day MA could lead to resistance levels at 86.200 and 87.900. However, there is a possibility that oil prices may remain range-bound between the 100 and 200-day MAs.
Support levels for oil prices include 83.50 (200-day MA), 83.00, and 81.58, while resistance levels are at 86.200 and 87.900. It is essential for investors to closely monitor these levels to make informed decisions.
In conclusion, the recent surge in oil prices due to declining US stockpiles presents both challenges and opportunities for investors. By staying informed and monitoring key technical levels, investors can navigate the market effectively and potentially capitalize on the current market conditions.