Oil stabilized after recording the largest decline in two weeks, amid signs of an increase in US inventory, in addition to weak technical indicators.
West Texas Intermediate crude settled above $74 a barrel after falling 1.9% on Wednesday, with Brent crude approaching $80. The American Petroleum Institute reported that stocks nationwide rose by 1.8 million barrels, according to a report seen by Bloomberg, with stocks expanding in the Cushing Center as well. This reinforces signs that supply is outstripping demand as the end of the year approaches.
Official data on US inventories, as well as production and demand indicators, are scheduled to be released later Thursday from the Energy Information Administration. Crude oil volumes at Cushing, Oklahoma, have risen over the past nine weeks, and the 10th surge, if confirmed, would be the longest streak of flows since 2016.
Crude rose about 8% after falling to its lowest levels in December, as Houthi attacks on ships in the Red Sea forced tankers and other ships to divert to take longer trips, which led to higher costs. Although there is a US-led task force to protect the key waterway, shipping companies, including Hapag-Lloyd AG, still say they will avoid this route.
On the technical side, both benchmarks have just entered a bearish dead cross, with the 50-day moving average falling below the 200-day moving average – for the first time since September 2022. This pattern has often heralded further weakness in the past. .
