Crude Oil News Today: Will WTI Surge Past $86 on Summer Demand?

Weekly Light Crude Oil Futures

Chart Analysis Reveals Bullish Momentum

The provided chart illustrates WTI crude’s bullish trend since June. The price has broken through several key resistance levels, including the $80.22 mark. The current price of $83.16 is approaching the next significant resistance at $86.24. A breakthrough could potentially push prices towards the $92.02 level, which represents a major resistance point from September-October 2023.

Inventory Drawdowns Drive Weekly Gains

This week’s primary price driver was a significant reduction in U.S. crude inventories. Weekly data showed a 12.2 million barrel decrease in crude stocks and a 2.2 million barrel drop in gasoline inventories. The American Petroleum Institute reported an even larger weekly crude inventory draw of 9.163 million barrels, surpassing analysts’ expectations.

Summer Demand Outlook Strengthens

The American Automobile Association’s forecast of a 5.2% increase in Independence Day travel compared to last year supports the bullish sentiment for this week’s gasoline demand. This aligns with analysts’ predictions of a tighter market in the coming weeks as summer fuel consumption rises.

Geopolitical Tensions and OPEC+ Influence

This week saw Middle East tensions reintroduce a geopolitical risk premium to oil prices. Meanwhile, OPEC+ continues to support prices through production cuts, despite slight output increases from Nigeria and Iran in June.

Shift in Weekly Market Sentiment

Recent weeks have witnessed hedge funds and money managers increasing their petroleum purchases, moving from bearishness to a more neutral stance. This shift provided additional support to this week’s prices.

Price Targets and Weekly Forecast

Looking ahead, UBS projects global oil demand growth of 1.5 million barrels per day this year. Both UBS and JPMorgan have set Brent crude price targets at $90 per barrel in the coming months, with UBS expecting this level to be reached this quarter.