. Daily Market Outlook and Market News | Capital Street Fx

Oil drops more than 1% as U.S. stockpiles sap rally

Brent Oil  was trading 1.19% down at  $84.64.

Oil prices fell on Wednesday after industry data showed crude oil stockpiles rose more than expected and fuel inventories increased unexpectedly last week in the United States, the world’s largest oil consumer.

Brent  Oil  Futures fell $1.01 cents, or 1.2%, to $85.39 a barrel by 1050 GMT after closing at the highest level in seven years on Tuesday.

West Texas Intermediate (WTI) futures were down $1.19, or 1.4%, at $83.46 after gaining 1.1% in the previous session.

Both benchmarks remain near multi-year highs and closed on Friday with a seventh straight weekly gain as major producers hold back supply and demand rebounds after the easing of pandemic restrictions.

Crude oil inventories rose by 2.3 million barrels in the week ending Oct. 22, market sources said late on Tuesday, citing American Petroleum Institute figures. That was more than the expected 1.9 million barrel gain.

Gasoline inventories rose by 500,000 barrels and distillate stocks increased by 1 million barrels, compared with a forecast for both to drop. [API/S]

With Brent rising for the past eight weeks and WTI climbing for the past 10 weeks, prices are starting to look overbought, analysts said.

“Barring more bullish headlines, which is possible considering what we saw yesterday, we could see some profit-taking in Brent and WTI, which would be healthy for the market,” said Craig Erlam, senior market analyst at OANDA.

Brent Oil , RSI Stood at 61.063, the current price is trading Above  the Moving Averages 20 & 50 . So, a  Buy trade can be executed with the following target and stop-loss:

TRADE SIGNAL-Brent Oil– Buy: 84.30, TARGET:-91.30, STOP LOSS:- 81.30.

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