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Following the American Petroleum Institute’s (API) unexpectedly high data on US crude stocks, Prices of Brent crude oil futures are essentially unchanged trading at $85.63 per barrel on Wednesday. Spot Brent is trading up 0.17%, at $86.077 per barrel. WTI futures are trading at $81.170 per barrel, up 0.24%. Spot WTI crude oil is also 0.18%, trading at $81.118
This unanticipated accumulation of 9.337 million barrels raises questions about how well the recent OPEC output restrictions have supported prices.
If OPEC+ output limits are followed by Russia, Brent futures might reach $100 per barrel. On the data front; a robust Personal Consumption Expenditures (PCE) Price Index reading is expected on Friday, which is why the US Dollar Index (DXY) is holding steady over 104.00 in the meanwhile.
A strong PCE print would temper expectations for additional rate reduction in 2024, which would support the US currency.
Performance of Oil Prices
Following the unexpected 9.337 million barrel increase in US crude stocks revealed by the API, oil prices have declined.
A drawdown estimate of 1.275 million barrels is anticipated to be announced later today by the US Energy Information Administration (EIA).
The market would be closely monitoring any extensions of the output cuts by OPEC+.
The price of oil may decline if the US Dollar Index rises.
Potential levels of support for oil prices in the near future are indicated by technical analysis.
What Comes Next
In order to validate or refute the API report, the market requires the official release of inventory data from the EIA. The way that production cuts are decided at the next OPEC+ meeting will also have a big impact on how oil prices develop in the future.
