Chat with us, powered by LiveChat

Choose country & language:

Close Icon

Oil prices rise as US crude inventories decline

Home >  Daily Market Digest >  Oil prices rise as US crude inventories decline

detail_image_market
author_img

Written by:
Myrsini Giannouli

03 November 2022
Share the article

Oil prices continued to rise on Wednesday, with WTI price climbing above $90.0 per barrel. If the WTI price declines, it may encounter support near $82.1 per barrel, while resistance can be found at the $90.3 per barrel level and further up at $93.4 per barrel. 

According to data released on Wednesday, US crude oil inventories dropped by 3.1M barrels last week, against a gain of 2.6M barrels the week before. The large drop in inventories far exceeded expectations of a more modest drop by 0.2M barrels, boosting oil prices on Wednesday.

Oil prices continued to rise even after the US Federal Reserve raised interest rates by 75 basis points, bringing its interest rate to 4.0%. Aggressive rate hikes stifle economic activity, undercutting oil demand. The Fed’s rate hike however fell within market expectations, failing to curb the ascent of oil prices.

Oil prices remain high ahead of the US midterm elections, causing a headache for the US government. On Tuesday, US President Joe Biden warned oil companies to stop profiteering from the war between Russia and Ukraine. Major oil companies have posted record profits this year, which may induce the US government to impose a windfall tax on them.

The Biden administration has recently announced the release more of barrels from the US Strategic Petroleum Reserves, checking the ascend of oil prices. US President Joe Biden announced a plan to sell 15 million barrels from the SPR representing the latest tranche of the 180-million-barrel program. 

One of the determining factors of oil prices in the past few months has been the uncertainty governing oil demand from China. China is the world’s largest energy importer and concerns about renewed lockdowns are stifling oil demand. China’s zero-Covid policy has isolated the country and has dealt a heavy blow to its economy. Reports that the Chinese government would ease Covid measures have boosted oil prices this week. In addition, manufacturing PMI data for China released on Tuesday exceeded expectations, raising hopes for the recovery of the country’s industry. Lower than-expected factory activity data in China renewed fears of declining oil demand on Monday however, helping check oil prices. In addition, last week, lower-than-expected data for Chinese oil demand put pressure on oil prices. Although demand increased in September compared to August, Chinese crude oil import data is approximately 2% lower than last year. 

OPEC+ recently decided on a massive output cut of 2 million BPD starting in November. OPEC performed the largest reduction since 2020 in a bid to raise prices, led by Saudi Arabia and Russia. Despite mounting global recession risks, OPEC+ members strive to reclaim the $100 per barrel key level. 

WTI 1hr chart

TRADE WTI

The content provided in this material and/or any other material that this content is referred to, whether it comes from a third party or not, is for information purposes only and shall not be considered as a recommendation and/or investment advice and/or investment research and/or suggestions for performing any actions with financial products or instruments, or to participate in any particular trading strategy and cannot guarantee any profits. Past performance does not constitute a reliable indicator of future results. TopFX does not represent that the material provided here is accurate, current, or complete and therefore shouldn't be relied upon as such. This material does not take into account the reader's financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of TopFX, no reproduction or redistribution of the information provided herein is permitted.

author_img

Written by:
Myrsini Giannouli

Share the article:

Latest news

main_image_market

Dollar steady ahead of key US economic data

Myrsini Giannouli 28 March 2024
main_image_market

Gold prices advance as US treasury yields decline

Myrsini Giannouli 28 March 2024

Oil prices rise on lower-than-expected US stockpiles

Myrsini Giannouli 28 March 2024

Bitcoin struggles to maintain key $70,000 level

Myrsini Giannouli 28 March 2024
Why TopFX
10-years
13+ years

industry presence
as a Liquidity Provider

Spreads
Spreads
from 0.0 pips

and reliable execution

Segregated
Segregated

client funds

First-class
First-class

customer support

Open your Live Account in 3 Steps
Step 1

Fill in the registration
form and click
"Create account".

Step 2

Once you are in the client secure area, please proceed with uploading your Proof of Identity and Proof of Residence.

Step 3

When your live account is approved, you can deposit funds and start trading on your chosen platform!

IMPORTANT

The website you are now viewing is operated by TopFX Global Ltd, an entity which is regulated by the Financial Services Authority (FSA) of Seychelles with a Securities Dealer License No SD037 that is not established in the European Union or regulated by an EU National Competent Authority.

If you wish to proceed please confirm that you understand and accept the risks associated with trading with a non-EU entity (as these risks are described in the Own Initiative Acknowledgment Form and that your decision will be at your own exclusive initiative and that no solicitation has been made by TopFX Global Ltd or any other entity within the Group.

Don't show this message again

Cookies on TopFX

The TopFX website uses cookies to optimise user experience.

These cookies fall under the following categories: essential, functional and marketing cookies. Marketing cookies may also include third-party cookies.

Manage Preferences

You can customize your selection of which cookies you want to accept.

  • Essential

    These cookies are necessary for the website to function correctly and cannot be switched off.

  • Functional

    Functional cookies allow the website to remember users' preferences and the choices you make on the website such as username, region, and language.

  • Marketing

    These cookies are used to track visitors across our websites and show you more relevant ads. Marketing cookies also include third-party cookies from partners. For more information relating to data protection & collection please view our Privacy Policy and Cookie Disclosure.