Overnight Crude Inventory numbers pulled the rug out from under the feet of the oil rally. The surprise jump of 1.6 million barrels against an expected drop of 400,000 barrels was at odds with the API’s 1.8 million drawdowns on Tuesday.
Both Brent and WTI immediately gave up all the day’s gains to finish down around 0.50% on the day. The oil market also seems to have ignored the equity markets lead regarding the FOMC minutes. Last night, the committee discussed the start of running down the Federal Reserve’s balance sheet this year. This may imply higher rates which are unlikely to be supportive of oil, no matter what OPEC does.
Once this is digested, we may have seen the best of the oil rally in the short term. Brent spot has immediate resistance at $55.00 a barrel in Asia with support at $53.50. WTI spot has resistance today at $51.60, the overnight high, with support just below its current level at $50.40 and then $49.50.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.