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Technical and fundamental factors for oil decline ahead of storage data

oil futures CL 2024 07 10

Technically, oil bounced off our resistance line on the Daily charts.

Traders await updated OPEC forecasts and US storage data

Oil futures fell on Wednesday after lower-than-expected inflation data from China underscored concerns about crude demand as traders await a monthly report from the Organization of the Petroleum Exporting Countries and weekly U.S. storage data.

West Texas Intermediate crude oil for August delivery CL.1 CLQ24 fell 92 cents, or 1.1%, to $81.41 a barrel on the New York Mercantile Exchange. September Brent crude BRN00 BRNU24, the global benchmark, fell $1.09, or 1.3%, to $84.66 a barrel on ICE Futures Europe.

Market drivers

China's consumer price index rose 0.2% year on year in June, the National Bureau of Statistics said on Wednesday. That's below the 0.4% growth expected by economists in a Wall Street Journal survey and down from a 0.3% rise in May. Meanwhile, the producer price index fell 0.8% in June from a year earlier, marking the 21st straight month of decline. The WSJ poll predicted a decline of 0.7%.

Samer Hasn, a market analyst at XS, said in emailed comments that the data heightened concerns about demand.

Traders were awaiting the release of OPEC's monthly report, which will include the group's latest estimates of global crude oil demand for this year and 2025.

Storage data will also be a focus. The American Petroleum Institute late Tuesday reported that U.S. crude inventories fell by 1.92 million barrels last week, according to a source citing the data, while gasoline inventories fell by 2.95 million barrels and distillates rose by 2. .34 million barrels.

The Energy Information Administration will release official inventory data on Wednesday morning US time.

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