Continued bearishness in crude oil pricesOn December 17, 2024, oil prices showed a slight stabilization following the drop in U.S. crude inventories and the Federal Reserve's (Fed) interest rate cut. However, gains were limited by expectations that the Fed will slow the pace of cuts in the coming months. Brent crude oil futures rose 20 cents, closing at $73.39 per barrel, while West Texas Intermediate (WTI) crude rose 50 cents, reaching $70.58. Despite these increases, gains moderated after market close.
The U.S. Energy Information Administration reported a drop in crude oil and distillate inventories, while gasoline inventories increased in the week ending December 13. In addition, total product supply, a key indicator of demand, grew to 20.8 million barrels per day, reflecting an increase of 662,000 barrels from the previous week.
Despite the partial optimism around demand, crude oil prices fell briefly following the Fed's announcement to cut interest rates, although the pace of these cuts is expected to slow. The Fed projects only two additional rate cuts through the end of 2025, which could boost oil demand, but also dampen near-term expectations.
On technical analysis, crude oil continues to lose value, with the price looking for the $68 area since the start of the European session. The POC mid-zone is around $70.20, and the RSI is highly oversold at 30%. The crossover of the 200-average over the 100-average reinforces the prospect of a bearish continuation, as anticipated in previous weeks.
Ion Jauregui - ActivTrades Analyst
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