Oil prices rose on Thursday, shaking off a recent decline. Investors anticipated tighter supplies with OPEC’s producer alliance, which was expected to stay the course of its production cuts.
USOIL – Daily Chart
US oil prices are trading against a rising trendline, which has managed to cap prices. The next resistance level is around $85.
According to Energy Information Administration data, oil prices have been under pressure since last week’s unexpected rise in crude oil and gasoline inventories, driven by a rise in imports and sluggish gasoline demand.
However, the increase in crude stock was smaller than the build projected by the American Petroleum Institute, with analysts noting that the increase was lower than expected for the time of year.
“We expect US inventories to rise less than normal, reflecting a global oil market in a slight deficit,” SEB analyst Bjarne Schieldrop said. This will likely support the Brent crude oil price in the future.”
Investors will be watching next week’s meeting of the OPEC producer group for clues on the path for oil production. Some increased geopolitical risk has raised the expectation of supply disruption. However, OPEC is unlikely to change its oil output policy until a full gathering in June.
“We do not see any indications that the recent run-up in prices due to the heightened Russian infrastructure risk will prompt any policy reversal at next week’s JMMC meeting.” RBC analysts said.
“Any serious shift will likely have to wait until the June 1 ministerial meeting, and even then, we believe the group will be very judicious when it comes to unwinding any cuts.”
Analysts will also consider the recent accident that shut down a seaport in Baltimore. In 2023, around 52 million tons of international cargo worth around $80.8 billion passed through the port. Around 4,900 trucks must be rerouted, and fuel costs could rise.
