On Thursday (September 15), international oil prices rose. Although a large increase in U.S. crude oil inventories has caused concerns about weak demand, and a strong dollar is also a headwind for oil demand, potential supply disruptions still support the market. NYMEX crude oil sees 90-90.40 dollar range.
At 16:10 Beijing time, NYMEX crude oil futures rose 0.62% to US$89.03/barrel; ICE Brent crude oil futures rose 0.49% to US$93.58/barrel.
Data released by the U.S. Energy Information Administration (September 14) overnight showed that U.S. crude oil inventories unexpectedly rose sharply in the latest week, and distillate inventories also rose far more than expected, indicating weak fuel demand and restraining oil prices.
A stronger dollar is also a headwind for oil demand, with dollar-denominated commodities including crude oil becoming more expensive for holders of other currencies. Analysts at Haitong Futures said expectations of further U.S. interest rate hikes will continue to cloud the market and limit the rebound in oil prices.
However, the growing likelihood of a U.S. railroad outage due to ongoing labor disputes has added support to the market. Three unions are negotiating new contracts that could affect rail transport, which is important for crude oil and petrochemical shipments.
“Oil prices have been pricing in a global recession, but even with flat global growth, oil demand will remain fairly strong relative to ongoing supply concerns,” Clifford Bennett, chief economist at ACY Securities, said in a note. He added that the market There has been a lot of focus on the demand side lately, but the actual demand drop expectations may have been overdone, forgetting that there are still some issues on the supply side.
The International Energy Agency said on Wednesday (September 14) that the shift from natural gas to oil for heating energy is expected to become more widespread. The agency also said oil demand will average 700,000 barrels per day (bpd) from October 2022 to March 2023, double the level of the same period a year ago. This, combined with overall expectations of weaker supply growth, helped lift the market.
On the daily line, NYMEX crude oil started a downward (iii) wave trend from $97.66, and the lower support looked at the 61.8% target at $74.21. Wave (iii) is a sub-wave of the descending ((c)) wave that started at $123.68. Wave ((c)) is part of the corrective 4 wave that started at $130.50. On the hourly chart, oil prices are struggling to stand above $89, and may challenge the $90-90.40 range in the market outlook.