Oil price rallies on Saudi Oil Minister’s comments, inventory drawdown
By TradeRadius | Wed, 24 May 2023 13:17:18 UTC
Oil price continues to rally after Saudi Prince Abdulaziz bin Salman, the country’s Oil minister, warns short-sellers to “watch out”.
Inventory data shows a steep drawdown in the prior week, reflecting rising demand ahead of US driving season.
A bullish triangle pattern forms on the 4-hour chart, increasing the evidence the bearish trend may be reversing.
EIA inventory data to be released soon could provide volatility.
Oil price trades roughly a percentage point higher on Wednesday after data from the US showed a dramatic fall in Oil inventories, indicating rising demand. The Oil price was given a further lift after the Saudi Oil Minister warned Oil short-sellers to “watch out” ahead of the OPEC+ meeting on June 4.
At the time of writing, WTI Oil is trading around $74 and Brent Crude Oil in the upper $77s. A bullish right-angled triangle has completed on the 4-hour chart, posing a challenge to the overall bear trend.
Oil news and market movers
Oil price rises after the American Petroleum Institute (API) publishes weekly inventory data which shows a 6.7 million barrel drop in stocks, indicating rising demand.
Analysts had expected the API data to show a 525,000 barrel rise in inventories.
Saudi Oil Minister, Prince Abdulaziz bin Salman, warned Oil speculators to "watch out" and that they might suffer as they did "in April".
His comments have been taken as warning to short-sellers that the Oil price might rise.
Abdulaziz defended OPEC and its decision to cut production by 2 million barrels per day (bpd) at its meeting in October 2022. Given the Oil price is at similar levels to October, it may suggest there is a risk the cartel will announce another supply cut in June.
Oil continues to be underpinned by optimism that a deal will be reached on the US debt ceiling.
Republican House Speaker Kevin McCarthy said, after talks with Democrats on Monday that, “I believe we can still get there. I believe we can get it done.” Adding that he thought the talks were the most productive so far.
The US Memorial Day weekend kicks off on May 27 and marks the beginning of the US summer driving season which will provide a seasonal lift to Oil demand, supporting prices.
Oil price has decoupled temporarily from the US Dollar which catches a bid as Federal Reserve (Fed) officials continue to talk about the possibility of more rate hikes, and US macro data supports.
Talk of more rate hikes ought to provide a headwind for Oil, which is priced in USD.
EIA inventory data scheduled for release at 14:30 GMT will provide an official estimate of Oil inventories. If the data supports the API drop, it could give another lift to Crude prices.
Crude Oil Technical Analysis: Bullish triangle in downtrend
WTI Oil is in a long-term downtrend from a technical perspective, making successive lower lows. Given the old adage that the trend is your friend, this favors short positions over long positions. WTI Oil is trading below all the major daily Simple Moving Averages (SMA) and all the weekly SMAs except the 200-week which is at $66.89.
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Back to Live CommentaryOil price rallies on Saudi Oil Minister’s comments, inventory drawdown
By TradeRadius | Wed, 24 May 2023 13:17:18 UTC
Oil price trades roughly a percentage point higher on Wednesday after data from the US showed a dramatic fall in Oil inventories, indicating rising demand. The Oil price was given a further lift after the Saudi Oil Minister warned Oil short-sellers to “watch out” ahead of the OPEC+ meeting on June 4.
At the time of writing, WTI Oil is trading around $74 and Brent Crude Oil in the upper $77s. A bullish right-angled triangle has completed on the 4-hour chart, posing a challenge to the overall bear trend.
Oil news and market movers
Crude Oil Technical Analysis: Bullish triangle in downtrend
WTI Oil is in a long-term downtrend from a technical perspective, making successive lower lows. Given the old adage that the trend is your friend, this favors short positions over long positions. WTI Oil is trading below all the major daily Simple Moving Averages (SMA) and all the weekly SMAs except the 200-week which is at $66.89.
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