Crude oil price recovery takes shape amid failure to test January low

Crude oil price recovery takes shape amid failure to test January low

The price of oil trades to a fresh weekly high ($82.94) as it carves a series of higher highs and lows, and crude may continue to retrace the decline from the monthly high ($90.39) as data prints coming out of the US instill an improved outlook for energy consumption.

Recent figures from the Energy Information Administration (EIA) showed crude inventories contracting for the first time this month, with stockpiles narrowing 0.215M in the week ending September 23 versus forecasts for a 0.443M rise. Signs of resilient demand may influence the Organization of Petroleum Exporting Countries (OPEC) as the group reverts to its prior production schedule, and the group may offer a steady supply over the coming months as the rising interest rate environment across advanced economies dampen the outlook for global growth.

In turn, OPEC may follow a preset path as the most recent Monthly Oil Market Report (MOMR) insists that ““in 2023, expectations for healthy global economic growth, combined with anticipated improvements in the containment of COVID-19 in China, are expected to boost oil consumption,” and it remains to be seen if the organization will adjust its production schedule at the next Ministerial Meeting on October 5 as US output remains below pre-pandemic levels.

Until then, data prints coming out of the US may sway oil prices as a deeper look at the figures from the EIA show weekly field production narrowing to 12,000K in the week ending September 23 after printing at 12,100K for four consecutive weeks

With that said, recent developments may prop up the price of oil as expectations for robust demand are met with signs of limited supply, and crude may stage a larger recovery over the coming days amid the failed attempt to test the January low ($74.27).

Crude oil price daily chart

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