Brent Crude Oil Rises as US Economic Forecast Gets Upward Revision
After closing at mixed levels on Tuesday, Brent crude oil saw a rise in prices at the opening today, reaching around $85.88 per barrel. This increase was boosted by the US Energy Information Administration’s (EIA) upward revision of the US economic forecast, providing a positive outlook for oil prices.
According to the monthly report released by the EIA on Tuesday, US crude oil production is expected to reach a record 12.76 million barrels per day this year, with an increase of 850,000 barrels per day. For next year, crude oil production is projected to rise by 330,000 barrels per day to 13.09 million barrels per day. The upward revision in the forecast is attributed to expectations of higher well productivity and increased crude oil prices.
The EIA also stated that the global benchmark Brent crude oil is predicted to average $86 per barrel in the second half of this year, a $7 increase from its previous forecast. Additionally, the EIA expects US gross domestic product (GDP) growth to rise to 1.9% this year, up from a previous forecast of 1.5% last month.
The rise in oil prices since June is largely due to Saudi Arabia’s extension of voluntary output cuts and growing global demand. However, there are also some negative factors to consider. Data from the American Petroleum Institute (API) revealed that US crude oil inventories increased by 4.067 million barrels last week. Furthermore, all three major US stock markets experienced a decline, with the S&P index closing down 0.43%, the Dow Jones index dropping 0.45%, and the Nasdaq index decreasing by 0.79%. Moody’s downgrade of several bank ratings has raised concerns about the health of US banks and the overall economy.
While the upward revision of the US economic forecast provided a boost to oil prices, the increase in US API crude oil inventories and the decline in US stocks have limited the rise. Today, the focus will be on news regarding the rating of the banking industry and upcoming EIA data.
It is important to note that the content of this article is for reference only and should not be taken as future investment advice. The articles published by CPT Markets are based mainly on international financial data reports and news.
In terms of technical analysis, the upper resistance lies at $85.80 and $86.20, while the lower support level is at $85.40.