Crude oil inventory draw drive market sentiment

Crude oil prices traded higher as the US EIA weekly report unveiled a notable draw in US crude oil inventories.

The decline supported the market after a month of price corrections as the market reacted to geopolitical developments.

However, gains were tempered by the resilient US dollar and lingering uncertainties regarding US interest rate cuts and potentially declining geopolitical risks in the Middle East.

The latter could continue to expose the market to increased volatility as conditions in the region change rapidly while successful cease-fire negotiations could weigh on oil prices.

At the same time, the market could find support in the US government’s plans to boost the Strategic Petroleum Reserve while OPEC could maintain its production cuts to support prices. Furthermore, China’s import data signalled higher demand for oil, while PMI readings remain strong.