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Author: Mr Amar – Technical Analyst

At 110.9, West Texas Intermediate (WTI) Crude Oil is up 0.22%, up from a low of $110.6 in the Asian session so far. Futures closed higher on Wednesday after a report showed US gasoline inventories fell last week ahead of the start of the summer driving season over Memorial Day weekend. WTI Crude for July delivery closed up $0.56 at $110.33 a barrel. Inventories continue to shrink and US inventories fell last week, according to data from the Energy Information Administration. Gasoline inventories fell 0.5 million barrels, less than the 4.22 million drops reported by the American Petroleum Institute on Tuesday, but still a fall ahead of high summer demand for the fuel.

Meanwhile, Brent crude remains high despite trading marginally lower post-Asia. The US dollar has found some advantage after markets reacted to an increasingly hostile situation in Ukraine, keeping investors safe in the form of the US dollar. Government bonds (10 years) and increased demand for the greenback. Let’s stay on the topic of Russia and Ukraine: The much-discussed EU oil ban will be decided in the coming days, according to EU Commission President Ursula von der Leyen. So far, the ban has proved more difficult than initially anticipated, with landlocked countries like Hungary concerned about the negative impact if the ban is enforced, meaning Brent crude should remain where it was prior to the announcement.

A projected rise in oil production to an all-time high of 5.2 million barrels per day in the US Permian Basin is unlikely to close the 2-3 million bpd gap due to the loss of Russian supplies. Still, the rise in oil markets this week was tempered by strict COVID19 lockdowns, which raised concerns about falling fuel demand in China, the world’s largest oil importer, and concerns about inflation, which is leading to slower global growth.