Crude Oil Commentary – Thursday, March 14

First Inventories Draw in 7 WeeksCrude prices are starting to build some bullish momentum here. After early weakness on Monday, crude futures have now recovered around 5% off the week’s lows and are fast approaching a fresh test of the YTD highs. Futures pushed firmly higher yesterday in response to the latest data from the EIA which showed that US crude inventories fell by 1.5 million barrels last week, in stark contrast to expectations for a 1.5-million-barrel increase. The data marks the first inventories drawdown in seven weeks and has raised hopes that demand is improving in the US. Russian Supply Disruption & OPEC CutsAlongside news of the inventories draw, crude prices were also bolstered by reports that a Ukrainian drone had damaged a Russian oil producing site. This comes just weeks after Russia announced, along with OPEC, that it would be extending (but also deepening) the level of its production cuts. OPEC+ announced that the current curbs, totalling around 2 mill barrels per day, will run until June now as the cartel and its allies attempt to drive prices higher again. Weak USD Supporting OilA softer US Dollar is also helping oil prices this week. Despite hotter-than-forecast US inflation, DXY remains near the foot of recent declines, having broken down to fresh 2024 lows last week. With traders still focused on upcoming Fed easing, USD looks vulnerable to further downside near-term which should help support oil prices further. Technical Views CrudeOil prices continue to trade within the bull channel which has framed the recovery off YTD lows. With price now trading back above the 77.64 level, the focus is on a continuation higher, in line with bullish momentum studies readings, with 82.59 and the channel highs the next objective for bulls. More By This Author:Gold Commentary – Thursday, March 14Copper Market Commentary – Wednesday, March 13Bitcoin Commentary – Wednesday, March 13