- Summary:
- Crude oil inventories rise, but the downside is capped as a storm in the Gulf Coast strengthens into Hurricane Delta, forcing the closure of oil platforms.
Crude oil prices on the Brent benchmark was mildly lower this Wednesday as data from the Energy Information Administration signalled a rise in crude oil inventories to 500,000 barrels (0.5M) for the week ended October 2. This was an increase over the previous figure of -2.0M and also more than the consensus figure of -1.2M.
The increase in crude oil stocks produced a bearish response on the crude benchmarks, which were already under pressure from risk-off flows following the cancellation of further stimulus talks between US Republicans and Democrats until after the November 3 elections.
Details from the crude oil inventories report show that US crude oil refinery inputs averaged 13.9 million barrels per day, indicating a rise of 184,000 barrels per day beyond the average size of refinery inputs of the previous week. US crude oil imports also rose by 600,000 barrels to 5.7 million barrels per day last week.
However, the downside appears limited by events in the Gulf Coast, where Hurricane Delta has forced the closure of several oil platforms as it prepares to make landfall on Friday.
Crude oil price on the Brent benchmark is trading at 41.54, representing a loss of 0.91% for the day as of writing.
Technical Outlook for Crude Oil Price
Brent crude is now testing support at 41.43 after buyers failed to take price above the 42.50 minor resistance that has caged prices to the upside for close to 10 trading sessions. Further bearish pressure which enables crude oil prices to break down this support could clear the pathway towards the 39.57 support. 36.40 and 33.83 remain viable potential targets to the south.
Conversely, a bounce on the 41.43 support allows the price to attack 42.50 once more, but any further convincing upside moves on crude have to clear this level for 44.16 to be actualized. 45.39 and 48.33 remain the immediate resistance targets.
Crude Oil Price Chart (Brent; daily)
