The oil market is influenced by the improvement and increase in supply from the Persian Gulf. In this regard, the reduction of U.S. petroleum product inventories and the increase in maritime transportation risks continue to support prices. WTI (West Texas Intermediate) oil currently remains below the resistance of $92.90 and is in a downward phase. Additionally, Brent oil needs to surpass $103.89 to change its trend.
Supply and Oil Inventory Status
Fundamental factors affecting the U.S. oil market are influenced by the improvement in Middle Eastern supply and the continued limitation in refinery product inventories. Oil exports from the Gulf Cooperation Council countries (excluding Iran) reached about 16.3 million barrels per day in September, equivalent to about 91% of pre-war levels. The majority of this increase in supply is attributed to Saudi Arabia.
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Despite the improvement in crude oil supply, U.S. intermediate product inventories in the latest report from the Energy Information Administration (EIA) saw a weekly decrease of over 2 million barrels, reaching 105.2 million barrels. In contrast, U.S. crude oil and petroleum product inventories show a limited increase. In the global oil market, concerns have gradually shifted from an absolute supply shortage to transportation risks.
Technical Analysis of Oil Prices
Texas oil is trading around $88.60 on the 4-hour chart and has once again approached the support level of $88.54. After several failed attempts to break through the downward trend line and moving averages, the price remains within a downward trend. The first support level is at $88.54, and a definitive break below this level could lead the price towards $86.31 and then $84.36.
On the other hand, the primary important resistance is at $92.90, followed by levels of $95.54 and $97.69 gaining more significance. Additionally, the RSI index remains below the neutral level of 50, indicating that downward pressure continues. As long as Texas oil does not stabilize above the level of $92.90, the bearish scenario remains more credible.
In the Brent oil market, transportation risks have largely replaced concerns about the absolute level of supply. Concerns about the security of Russian oil shipments and increasing geopolitical tensions have raised the costs and risks of oil transportation. Oil exports from Gulf Cooperation Council countries have improved, and the G7 countries have also agreed to release 100 million barrels from strategic reserves.
Brent is trading around $99.60 on the 4-hour chart and has moved to a range above the support of $98.71 after bouncing back from the support of $95.64. Currently, the main price resistance is at $103.89, and stabilizing above this level could pave the way for a move towards $107.06 and then $110.08.
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