US emergency crude reserve at a 20-year low
It was a tough week in all markets, including the energy and Oil markets. While Natural Gas touched another new record above $8.65, oil could keep its higher prices and again increase from the recent low at $95 seen on April 25. The United States began to release its strategic reserves from the beginning of May. And even though it has just started, the weekly inventory reports from the US Energy Information Administration on Wednesday showed the US stockpile in the emergency crude reserve at a 20-year low.
On top of that, today, Thursday, May 5, the OPEC+ meeting was also held with the widely expected decision. This meeting which was held with the participation of thirteen OPEC members and ten other world oil producers, lasted just 15 minutes without any reference to the issue of the Russian oil embargo by primarily European and announced that OPEC and its allies are committed to their primary plan of adding the 400bpd per month.
Data on both supply and demand sides have not shown much change. However, increasing tensions between Russia and European countries raised the Natural Gas price. Higher gas prices drive some consumers to oil and increase demand to increase fees. On the other hand, European also did not succeed in reaching the decision to impose sanctions.
We know that OPEC members even could not fully adhere to their commitments to increase production. Saudi Arabia and the United Arab Emirates, the biggest producers in OPEC, also affirmed their intent again to pump oil well below their capacity; therefore, if Europe moves toward a Russian oil embargo, the market can not replace the Seven million barrels per day Russian Oil, and results will be a disaster for the global economy.
Considering all mentioned data and news, there is not much change in the supply and demand process. Therefore current range between $94 and $108 is still in its place, with possible short-term moves outside this range.
From the technical point of view, it is the same; none of the up or downtrends has enough reason to be confirmed unless we can see a fully daily candle out of this range to create a new trend.
