17.05.202323:27 Forex Analysis & Reviews: Oil prices are being supported

Oil prices were rising on Wednesday. As of 17:36 London time, June futures for WTI rose by 2.91%, to $72.92.

The US Department of Energy published data, according to which commercial crude oil inventories in the US increased by 5 million barrels in the last week to 467.6 million barrels, compared to analysts' expectations for a drop of 900,000.

Meanwhile, US gasoline stocks fell more than forecast by 1.4 million barrels - to 218.3 million.

The US Department of Labor will report on the state of the labor market in the country, specifically on the number of initial applications for unemployment benefits submitted last week. The last time the number of applications increased by 22,000 to 264,000, which is already the highest level since October 2021. This time, analysts expect the indicator to decrease by 10,000.

After the release of these data, it will become clear what the current economic situation is in the US. This question has been very acute lately, as the world's largest economy is one of the main factors causing concern in the markets.

Oil suffered from the eurozone macro data. It turned out that Eurostat maintained its estimate of Eurozone GDP growth in the past quarter at 1.3% in annual terms. The index of investor confidence in the German economy fell to -10.7 points (from 4.1 points a month earlier).

Data from China also had a significant impact on the quotes. For instance, the volume of industrial production in China last month increased by only 5.6% in annual terms.

This indicator was worse than analysts' forecasts, who expected a much more significant increase by 10.9%. Retail sales in the country also grew insignificantly by 18.4%, although an increase of 21% was forecasted. As we can see, the Chinese economy is on a recovery trajectory, but its pace is not pleasing.

On the other hand, US plans to buy volumes of oil for the strategic petroleum reserve is seen as positive for the oil sector. We're talking about just 3 million barrels. Nonetheless, purchases for the strategic reserve should create additional demand, and consequently, contribute to price growth.

Generally, bulls have been waiting for this announcement since President Joe Biden approved the first sales of oil from the US strategic oil reserve in November of the year before last. Over eight months, almost 250 million barrels were sold from the reserve - a record amount for the 50 years of the reserve's existence. Now the Biden administration is planning to replenish the stocks.

In addition, the holiday season and car travel season are approaching, which means that the demand for oil will increase. Thus, support for oil prices is maintained. If there are no negative news from the US financial sector, then the price of oil, say, of the Brent benchmark, could easily jump to $80 per barrel.