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Oil Traders Awaiting Fresh Drivers

Oil Traders Awaiting Fresh Drivers

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Crude Stuck in The MudOil prices continue to stagnate this week with crude futures remaining tightly congested around the 77.64 level. Lack of movement in the US Dollar is one likely reason for the loss of momentum. Hawkish signalling from the Fed regarding the need to keep rates high for as long as possible has certainly stunted the bull run we saw across early Feb. However, a recent string of softer-than-forecast US data means that a H1 rate cut cannot be ruled out. In light of this, some uncertainty in the outlook has seen USD flows losing clarity over the last week, translating into the muddier action we’re seeing in oil prices.Fresh EIA Inventories SurplusYesterday, the EIA reported a larger-than-forecast inventories surplus of 4.2 million barrels. This was above the 3.1 million the market was looking for as well as the prior week’s 3.5 million barrel surplus. With demand concerns still a key issue, the data offered further resistance against higher prices near-term. Stockpiles have now risen for 5 consecutive weeks, reflecting the reduced demand seen currently. Alongside this, US crude production continues to stay around record highs, adding further pressure.What to WatchLooking ahead, crude prices will likely stay hemmed in until we see the next big directional move in USD. Alternatively. If news of a truce/ceasefire were to emerge out of the Israel- Hamas conflict this would almost be firmly market moving, likely sending oil prices lower near-term.Technical ViewsCrudeFor now, crude prices hold around the 77.64 level, sitting mid-channel. Momentum studies are flattening out here though focus remains on further upside while the channel holds with 82.59 the next resistance to note. To the downside, 72.61 is the next support to note.
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