Oil rises as U.S. inventories decline.
Oil under the bullish pressure today as U.S. petroleum inventories have fallen below the pre-pandemic five-year average amid the oil consumption accelerating but crude producers being slow to respond to rising prices, signalling more supply is needed. This is fuelling the latest upward reversal in oil prices with demand reaching its highest since 2019 – according to the U.S. Energy Information Administration, indicating the increasing strength of the economy. Further gains will be dependent on the subsequent OPEC+ group decisions, which can be tempted to abandon output limits, and on the pace of the spread of the Delta variant. No significant news from both fronts should allow for further oil gain in the coming trading sessions.
Expect buyers on downward corrections.
Next resistance to watch – 74.20
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