The crude oil market experienced a turbulent week, with prices oscillating as traders weighed economic data, global events, and supply-demand shifts.
The week began cautiously, saw a mid-week upturn, and then faced renewed pressure as various factors came into play. Despite the volatility, a key development emerged: traders demonstrated respect for technical support levels, particularly as positive U.S. economic news surfaced. This interplay of technical and fundamental factors allowed light crude oil to recoup most of its weekly losses, highlighting the market’s resilience and the importance of key price levels in shaping trading decisions.
U.S. Inventory Surprise: A Glimmer of Hope
The most positive factor of the week came from U.S. inventory data. The Energy Information Administration (EIA) reported a big decrease in crude and fuel stocks. Crude inventories fell by 3.7 million barrels, more than experts expected. Gasoline and distillate stockpiles also dropped significantly. This data showed strong U.S. oil demand, which usually pushes prices up. However, the market didn’t react much to this good news, showing that other factors were affecting traders’ decisions.
The China Conundrum: Demand Worries Persist
Ongoing concerns about weak oil demand from China, the world’s largest crude importer, continued to affect the market. China’s oil imports and refinery activity have been lower in 2024.