Daily Analysis UKOIL 3 May 2023

Oil prices continued their downward trend on Wednesday, following the sharp decline on Tuesday, which was the biggest fall since January. Brent crude oil slipped 0.4% to $75.02 per barrel, while WTI dropped 0.5% to $71.28 per barrel. The decline is attributed mainly to renewed concerns about the health of U.S. banks, which has raised concerns about the overall economy.

In addition, there are concerns about diesel demand, and U.S. heating oil futures have fallen to their lowest level since December 2021. The unexpected fall in China's manufacturing activity in April has also added to the pressure on energy prices, as China is the world's largest energy consumer and a top crude oil buyer.

Despite these pressures, U.S. crude stockpiles have fallen for a third consecutive week, according to market sources citing American Petroleum Institute figures on Tuesday. This is the first time this has happened since December, with stockpiles down by 3.9 million barrels last week.

In terms of policy, the U.S. Federal Reserve is expected to increase interest rates by 25 basis points on Wednesday to address inflation, while the European Central Bank is also expected to raise rates at its regular policy meeting on Thursday.

Support: 74.00 – 73.00 – 71.00        Resistance: 75.60 – 77.00 – 78.50