US crude stockpiles fell by 4.5 million barrels last week after a 10.176-million jump in the prior week
The oil market has been in recovery mode these days, extending a bounce from local lows seen below the $84 handle earlier in the month. During the previous session, Brent crude briefly rallied to the $93 level before retreating partially amid profit-taking. On Thursday, the futures have settled below the $91 figure, trading in negative territory as buying pressure has abated after the recent rally.
Brent crude climbed yesterday due to a bigger-than-expected US storage draw. The US Energy Information Administration said crude stockpiles fell by 4.5 million barrels last week after a 10.176-million jump in the prior week. The agency also reported a gasoline inventory slide of 2.37 million and distillate stockpiles drop of 3.185 barrels.
Oil prices were also driven higher by concerns about global supplies after Iran called for an oil embargo on Israel over the conflict in Gaza. According to OPEC sources, the producer group is not planning to take any immediate action on OPEC member Iran’s call.
Besides, China, the world’s biggest oil importer, reported faster-than-expected economic growth in the third quarter. Consumption and industrial activity also surprised on the upside last month. GDP grew 4.9% in July-September from the year earlier, while on a quarter-by-quarter basis, GDP grew 1.3% in the third quarter, exceeding the forecast for growth of 1.0%.
In the near term, Brent crude needs to hold above the $90 figure in order to stay afloat and refrain from a deeper pullback. Otherwise, the $88.80 support will come back into the market focus. On the upside, a decisive bounce above $91 would pave the way towards the $93 mentioned high that represents the key short-term bullish target. In a wider picture, oil lacks positive momentum in October after four months of gains in a row.
