Futures on US West Texas Intermediate Crude Oil were set for a second straight week of losses, as the planned release of 240 million barrels from consuming nations’ emergency oil stocks outweighed supply concerns stemming from western sanctions on Russia.
According to analysts, the emergency oil release of nearly 1 million barrels per day from May to the end of 2022 could limit a surge in prices in the near term.
Still, the move may not fully cover lost volumes in case more countries slap sanctions on Russia over its incursion into Ukraine.
“Although this is the biggest release since the stockpile was created in 1980, it will fail to ultimately change the fundamentals in the oil market. It is likely to delay further increases in output from key producers,” ANZ Research analysts wrote in an investor note, cited by Reuters.
They also added that the emergency stocks release might deter OPEC producers and US shale producers from speeding up production increases even with oil prices at current levels.
Additionally, the EU’s consideration to impose a ban on Russian oil may also restrict a near-term drop in oil prices.
“In the court of public opinion, pressure is mounting on Brussels to act, and if that pressure valve pops and the EU sanctions Russian oil, we could see Brent crude at $120 in a heartbeat,” Stephen Innes, managing director of SPI Asset Management, noted.
As of 8:27 GMT on Friday WTI Crude Oil Futures were gaining 1.29% to trade at $97.27 per barrel. Yesterday the black liquid went down as low as $93.81 per barrel, which has been its weakest price level since March 15th ($93.53 per barrel). WTI looked set to register a 2.11% weekly drop.
At the same time, Brent Oil Futures were edging up 0.21% on the day to trade at $101.59 per barrel. Yesterday the commodity went down as low as $98.48 per barrel, which has been its weakest price level since March 17th ($97.86 per barrel). Brent looked set to register a 2.48% weekly drop.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $96.22
R1 – $98.63
R2 – $101.23
R3 – $103.64
R4 – $106.05
S1 – $93.62
S2 – $91.21
S3 – $88.61
S4 – $86.01
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $101.13
R1 – $103.77
R2 – $106.17
R3 – $108.81
R4 – $111.46
S1 – $98.73
S2 – $96.09
S3 – $93.69
S4 – $91.30
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