- Crude oil markets ignored the Houthi's most successful ship attack to date.
- Weekly API crude oil values will be released later in the day.
- Falling crude oil demand in China is raising concerns in energy markets.
US West Texas Intermediate (WTI) crude oil weakened on Tuesday, retreating to $72.00 per barrel, on renewed concerns that global crude oil production will outpace growth by a much larger margin than initially expected. In 2023, crude oil markets initially anticipated that global production would reduce demand by a wide margin, sharply limiting supplies and sending barrel prices soaring, but lagging growth in key demand markets, specifically China, has turned market expectations of a supply rout into renewed concerns of a worsening oversupply on the back of record output from countries outside the Organization of the Petroleum Exporting Countries (OPEC). .
OPEC's efforts to cut crude oil production have run into a tough wall of increased production from non-OPEC countries, specifically the United States, which reached a record level of production in November and continues to consolidate. as the largest producer of barrels in the world. China's growth numbers remain below expectations, and faltering Chinese demand for crude oil leaves energy markets with much higher supply than expected.
The American Petroleum Institute (API) will release a weekly update on the US barrel count, which last week showed a surprising increase of more than 8.5 million barrels. The weekly barrel count from the Energy Information Administration (EIA) will be released on Wednesday, which last week recorded a massive increase in crude oil reserves of more than 12 million barrels.
A ceasefire in the Gaza conflict remains unlikely, and Yemen's Iran-backed Houthi rebels scored their biggest victory in a ship attack to date, forcing the crew of the bulk carrier Rubymar to abandon the ship on Monday. boat. The Houthis have attacked at least four different civilian vessels in the Red Sea since last week.
Despite multiple concerns over the conflict in the Middle East, crude oil markets faltered on Tuesday, keeping crude oil pinned in a rough near-term consolidation.
Technical outlook for WTI
Short-term action in US crude oil has been rough, with WTI testing $78.50 over the past week and barrel supplies struggling to stay on the bullish side after Tuesday's drop, where prices They were trapped at the 200 hourly moving average (SMA) near $77.00.
Overall momentum has shifted toward the bulls as crude oil bids claim higher ground after falling to $71.50 in February, but declines remain a technical danger for bidders.
Despite the recovery from recent lows near $68.00 per barrel, WTI is still down almost 18% from October 2023 highs near $94.00.
WTI hourly chart
WTI daily chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
