Crude oil yesterday decreased by -4.17% to close at 5705 as concerns over interest rates and inflation resurfaced, increasing questions about the prospects for gasoline demand. Pressure from important central banks was also perceived as being hawkish, which created worries that interest rates would keep rising for a longer period of time and worsen the impact on demand. In addition to the Bank of England and the Norges Bank raising interest rates more than most analysts had anticipated, Fed Chair Janet Yellen also informed the US Congress that additional rate increases will be required.
Because of refinery outages in the Midwest and increased supplies from Canada, U.S. crude oil inventories at the Cushing, Oklahoma, storage hub have reached their highest levels in two years. The US crude stocks, on the other hand, decreased by 1.246 million barrels last week, which was significantly less than the market’s forecast of a loss of 433,000 barrels.
According to a report from the U.S. Energy Information Administration (EIA), daily U.S. crude oil refining capacity increased by more than 100,000 barrels in 2022, reversing a two-year slide to reach 18.1 million barrels per day (bpd). The refinery expansion at Exxon Mobil (NYSE: XOM) Corp.’s Beaumont, Texas, facility, which started operating in March of this year, has a capacity of 250,000 barrels per day (bpd).
Technically, the market is experiencing new selling as open interest increased by 107.04% to settle at 16559, while prices are down by -248 rupees. Currently, Crude oil is receiving support at 5598, and a move below that level could result in a test of the 5491 levels. Meanwhile, resistance is now expected to be seen at 5889, and a move above could result in a test of the 6073 levels.
