Yesterday, crude oil fell by -4.64% to trade at 5756 as worries about the U.S. debt ceiling agreement dampened the market’s risk-on mood and conflicting signals from key producers muddied the supply outlook ahead of their meeting this weekend. Last week, Saudi Arabia’s Energy Minister Abdulaziz bin Salman cautioned short-sellers who were wagering that oil prices would decline to “watch out” in case this was a warning that OPEC+ may reduce supply.
The third-largest oil producer in the world is leaning towards maintaining output, according to remarks made by Russian energy officials and sources, including Deputy Prime Minister Alexander Novak. The overall amount of cuts by OPEC+ has reached 3.66 million barrels per day (bpd) as of April, according to Saudi Arabia and other OPEC+ members. Alexander Novak, the deputy prime minister of Russia, said that given that OPEC+ had only recently imposed output cuts, he didn’t expect any fresh actions from the organization.
According to the Energy Information Administration, US crude oil and distillate inventories surprisingly decreased last week, but petrol stockpiles increased more than predicted. As opposed to a poll’s prediction of an 800,000-barrel increase, crude inventories decreased by 12.5 million barrels in the week ending May 19 to reach 455.2 million barrels.
Technically, the market is experiencing new selling as open interest increased by 65.26% to settle at 16908 while prices decreased by 280 rupees. Currently, Crude oil is receiving support at 5653, and a move below that level could result in a test of the 5550 levels. Resistance is now anticipated to be seen at 5940, and a move above that level could result in a test of 6124.
