Crude oil dropped amid raising concerns about the outlook for fuel demand.

Crude oil yesterday settled down by -4.17% at 5705 as inflation and interest-rate worries returned to the fore, raising concerns about the outlook for fuel demand. Pressure also seen as hawkish messages from major central banks raised concerns that interest rates will continue to march higher for longer, thus impacting demand even more. Fed Chair told the US Congress that further rate hikes will be necessary, while the Bank of England and the Norges Bank increased interest rates by more than most analysts expected. 

oil inventories at the Cushing, Oklahoma, storage hub have risen to their highest in two years, as outages at Midwestern refiners crimp demand and higher flows from Canada add to supply. On the other hand, API data showed US crude inventories dropped by 1.246 million barrels last week, well below market expectations for a 433,000 barrel decline. Daily U.S. crude oil refining capacity reversed two years of decline and rose by more than 100,000 barrels in 2022 to 18.1 million barrels per day (bpd), according to a U.S. Energy Information Administration (EIA) report. The report does not reflect the 250,000-bpd expansion of Exxon Mobil (NYSE:) Corp’s Beaumont, Texas, refinery, which came online in March of this year. 

Technically market is under fresh selling as the market has witnessed a gain in open interest by 107.04% to settle at 16559 while prices are down -248 rupees, now Crude oil is getting support at 5598 and below the same and could see a test of 5491 levels, and resistance is now likely to be seen at 5889, a move above could see prices testing 6073.