In today’s technical analysis of Crude Oil (USOIL), the commodity experiences a slight decline, trading at $81.12, down by 0.33%. Crude Oil (USOIL) prices remained relatively stable on Thursday, buoyed by an unexpected decrease in U.S. crude inventories and the Federal Reserve’s adherence to its rate cut projections for the year.

Unexpected Inventory Decline Supports USOIL Prices

May futures for U.S. West Texas Intermediate crude slightly declined by 10 cents, or 0.1%, to $81.17 a barrel, following a 1.8% drop in the previous session.

The U.S. Energy Information Administration (EIA) reported a surprising fall in crude stockpiles for a second consecutive week, with a reduction of 2 million barrels to 445 million for the week ending March 15.

This drop, attributed to increased exports and refinery activity, defied analysts’ expectations of a 13,000-barrel increase.

Geopolitical Tensions and Rate Decisions Impact USOIL

Market strategist Yeap Jun Rong from IG noted that the bullish outlook for crude remains, driven by the continuous drawdown in U.S. inventories and concerns over supply disruptions due to the ongoing conflict between Russia and Ukraine.

Furthermore, gasoline reserves also saw a decrease for the seventh consecutive week, highlighting robust fuel demand.

The Federal Reserve’s decision to maintain interest rates between 5.25% and 5.50%, while projecting three rate cuts within the year, also provided optimism for economic growth and, consequently, for oil demand.

Supply Risks Amid Ukrainian Attacks on Russian Refineries

The crude oil market is pricing in the potential impact of Ukrainian drone attacks on Russian refineries. These attacks have resulted in the shutdown of approximately 7% of Russia’s refining capacity, equivalent to 370,500 barrels per day.

Analysts caution that prolonged disruptions could lead Russian producers to cut back on supply due to export challenges and storage limitations. In contrast, Germany’s economic situation showed signs of improvement in March, with a preliminary survey indicating a near stabilization in business activity within the services sector.

This mixed economic backdrop underscores the complex factors influencing the crude oil (USOIL) price forecast, as traders navigate through inventory dynamics, geopolitical risks, and global economic indicators.

Crude Oil (USOIL) Price Forecast

Crude oil is positioned just above its pivot point of $81.82, and USOIL faces immediate resistance levels at $83.01, $83.91, and $84.79. Support levels are established at $80.50, $79.65, and $78.67, respectively.

The Relative Strength Index (RSI) stands at 47, indicating a neutral momentum, while the 50-day Exponential Moving Average (EMA) at $80.72 suggests a bullish trend as long as prices remain above this mark. However, a dip below the $80.72 threshold could prompt a marked sell-off.

The overall market sentiment leans towards bullish, yet a cautious approach is recommended as breaking below the EMA level may trigger a sharp downward trend.