USOIL – Daily Chart
The price of USOIL is in a tight range as it looks for the next breakout and direction. There is resistance at the $73-74 level and support ahead of $70.
Oil prices were higher on Wednesday, marking a three-day winning streak, after disruptions in oil supplies in the US and Russia. Oil traders are also focused on the details of peace talks on Ukraine.
Russia reported that the flow of oil through the Caspian Pipeline Consortium (CPC), the main oil export route from Kazakhstan, had been reduced by 30-40% on Tuesday after a Ukrainian drone attack. According to Reuters, a 30% reduction in flow would mean a loss of 380,000 barrels per day of market supply.
Meanwhile, frosts in the United States threatened supply with the US The North Dakota Pipeline Authority estimating that production in the state could drop by up to 150,000 bpd due to cold weather.
Russian oil supply could increase in the coming weeks or months if ongoing peace talks with Ukraine lead to a breakthrough. The recent price action of oil could be hurt by further supply after prices rose sharply in January, but then slumped.
A build in US crude oil inventories is likely to have continued for a fourth consecutive week, with gasoline unchanged, according to a Wall Street Journal survey. Commercial crude stockpiles are expected to have risen by 2.4 million barrels to 430 million barrels in the week ended February 14, according to the survey. Eight expect an increase and two predict a decline, with predictions in a range of a build of 6.6 million barrels to a drop of 1.4 million barrels.
The oil price needs a positive catalyst to get further away from the support near $70 and inventories and Ukraine peace talks will be a driver in the near-term.
