Crude oil prices have been cautiously hovering near flat after rising for two consecutive days, as the market weighs reports of geopolitical risks in the Middle East and rising U.S. oil inventories. Both U.S. WTI crude oil futures and Brent crude oil futures were trading at close to the same levels at the end of the Asian market on Wednesday.
The recent strength of oil prices is due to technical support and turmoil in the Middle East, making today’s trend extremely important for both bulls and bears. According to Huitong Finance, analysts have been paying close attention to signs of long-short competition when oil prices are on the lower track of the recent upward channel. As the market remains sensitive to bad news, continued geopolitical turmoil in the Middle East and unexpected inventory data could impact oil prices.
Traders are particularly keeping a close eye on developments in the Middle East, including the recent attacks on shipping by Iran-backed Houthi rebels in the crucial Red Sea and the ongoing diplomatic efforts to bridge differences between Israel and Hamas over a Gaza ceasefire plan.
The U.S. Energy Information Administration (EIA) has also released its Short-term Energy Outlook (STEO) report, which indicates that U.S. oil production is expected to remain stable until 2025. However, recent data released by the American Petroleum Institute (API) showed an unexpected increase in crude oil inventories, raising concerns about oversupply. The US government’s EIA crude oil inventory data is set to be released tonight, with expectations for a rise in inventories.
At 13:45 Beijing time on Wednesday, the main US WTI crude oil price was at US$73.38/barrel, and the main Brent crude oil price was at US$78.62/barrel. The outcome of the EIA crude oil inventory data release is likely to have a significant impact on oil prices in the coming days.