Summary:
Asian oil prices surged, continuing the momentum from the US crude storage decline and the dovish Fed, with gains extending into Thursday's early trade.
Oil prices rose in early Asian trade on Thursday, extending gains from the previous session following a remarkable withdrawal from US crude storage and a dovish Fed.
Adding to bullish sentiment, oil tankers were attacked in the Red Sea. Yemen's Iran-backed Houthi rebels have hit a Norwegian tanker with at least one missile.
The group vows to block ships of any nation heading to Israel until Israel stops its offensive on Gaza. The US has said it will consider "appropriate responses" to such attacks.
The EIA said US crude inventories saw a bigger than expected 4.3 million barrels of crude from stockpiles during the week ended 8 Dec as imports fell. Both Brent and WTI futures were in contango through at least June.
In its monthly report, the OPEC blamed the latest crude price slide on "exaggerated concerns" about oil demand growth. The group kept its forecast for oil demand growth unchanged for 2024.
OPEC+ oil output cuts of 2.2 million bpd in the first quarter may not be long enough, analysts and traders said. Reduced supply in physical markets may not be evident until near the end of January.
Brent Crude trades well below its 200 SMA., but the RSI divergence indicates that downtrend is nearly exhausted. A retest of the upper end of the consolidation area is likely if it holds above $70.
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