25 Mar 2015
Brent Crude stalled by ever growing excess supply
FXStreet (Mumbai) - The gains in the Brent crude futures are being capped around USD 55.50/barrel on signs the global oversupply situation continues to worsen.
Chinese tanks fill up
A Sinopec trading executive told an industry forum today that China’s commercial and strategic storage is almost full with oil stocks hitting record highs. Meanwhile, the American Petroleum Institute data released in the US on Tuesday showed oil inventories rose by 4.8 million barrels in the week to March 20.
Furthermore, the analysts from the International Energy Agency and the Organization of the Petroleum Exporting Countries estimate that world oil demand is now running at more than 1.5 million barrels per day below supply on average. This indicates further worsening of supply glut and more weakness in the oil prices.
Brent supported by a weaker USD
Despite the growing evidence of excess supply across the globe, Brent Crude managed to sustain above USD 55.00/barrel, mainly on account of the weakness in the USD. The risk-on mood at the onset of the European session today saw the USD fall against major currencies, which helped Brent futures to recover losses from the low of USD 54.69/barrel to trade at the current level of USD 55.50/barrel.
Brent Crude Technical Levels
The immediate support is seen at 55.00, under which losses could be extended to 54.71 (hourly 200-MA). On the flip side, a break above 55.50, could open doors for 56.16 levels on the upside.
Chinese tanks fill up
A Sinopec trading executive told an industry forum today that China’s commercial and strategic storage is almost full with oil stocks hitting record highs. Meanwhile, the American Petroleum Institute data released in the US on Tuesday showed oil inventories rose by 4.8 million barrels in the week to March 20.
Furthermore, the analysts from the International Energy Agency and the Organization of the Petroleum Exporting Countries estimate that world oil demand is now running at more than 1.5 million barrels per day below supply on average. This indicates further worsening of supply glut and more weakness in the oil prices.
Brent supported by a weaker USD
Despite the growing evidence of excess supply across the globe, Brent Crude managed to sustain above USD 55.00/barrel, mainly on account of the weakness in the USD. The risk-on mood at the onset of the European session today saw the USD fall against major currencies, which helped Brent futures to recover losses from the low of USD 54.69/barrel to trade at the current level of USD 55.50/barrel.
Brent Crude Technical Levels
The immediate support is seen at 55.00, under which losses could be extended to 54.71 (hourly 200-MA). On the flip side, a break above 55.50, could open doors for 56.16 levels on the upside.