Crude Breaks Key Res Level As Supply Concerns Mount

Crude Rally ContinuesCrude prices yesterday broke out to their highest level since August 2022 as supply concerns continued to dominate the market. The rally saw crude prices poking above the 93.47 level which marked the October and November 2022 highs. The driver behind the fresh move higher this week has been the latest update from the Energy Information Administration. The EIA reported a larger than forecast drawdown in inventories last week at -2.2 million vs -0.7 million expected. On the back of a similar size drawdown over the prior week, the drawdown underscores the lack of supply in the market which is keeping prices underpinned currently.US Economy in FocusWith the US no longer expected to fall into recession this year, the demand outlook has stabilised. However, with OPEC+ heavily reducing its output, oil prices have risen sharply in recent months. With current OPEC+ cuts now extended through year end, oil prices look likely to remain supported, particularly with the US economy holding up as well as it is. Looking ahead, traders will be keeping a close eye on incoming US data with fresh strength likely to keep oil prices supported for now on improved demand expectations.Technical ViewsCrudeThe rally in crude prices has seen the market trading higher along with the bull channel upper limit. Price is now testing above the 93.47 level, a key resistance level over the last 18 months. With momentum studies bullish, the focus is on a continuation higher while price holds above this level, putting the 100-mark in view as the next objective for bulls.