Crude oil increased due to increased confidence in Chinese refineries’ demand for crude

In anticipation of increased crude demand from Chinese refineries, crude oil yesterday finished up 0.72% at 5877. According to data, China’s throughput at oil refineries increased by 15.4% in May compared to the same month last year, making it the country’s second-highest monthly total ever. According to the International Energy Agency’s (IEA) most recent Oil Market Report, India and China, the world’s two biggest consumers of oil, purchased up to 80% of the oil that Moscow exported in May.

“Russian crude oil that has been heavily discounted has found new clients, mostly in Asia. China increased liftings by 500,000 barrels per day to 2.2 million barrels per day, while India increased purchases from nearly nothing to close to 2 million barrels per day, according to the Paris-based oil agency. According to Russian state news outlets, Russian Energy Minister Nikolai Shulginov claimed it was “realistic” to reach oil prices of around $80 per barrel.

According to the Energy Information Administration (EIA), U.S. crude oil inventories unexpectedly increased significantly last week, while petrol and distillate inventories increased more than anticipated. The EIA said that crude stocks increased by 7.9 million barrels in the week ending June 9 compared to poll results that predicted a drop of 510,000 barrels.

Technically, the market is in short covering mode as evidenced by the market’s drop in open interest of -13.34% to close at 9188 while prices are up 42 rupees. Currently, Crude oil is receiving support at 5806 and a move below that level could result in a test of the 5736 levels. Meanwhile, a move above that level could result in a test of 5954.

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