Brent oil jumps to two-week high on slightly bullish inventory report

Brent oil clocked a two-week high of $52.46/barrel in the overnight trade after the US Energy Information Administration (EIA) reported a weekly increase in crude supplies, but also revealed bigger-than-expected declines in gasoline and distillate stockpiles for the week ended March 24.

Crude inventories rose by 900,000 barrels. However, gasoline inventories dropped 3.7 million barrels, while distillate stockpiles fell 2.5 million barrels last week. 

Meanwhile, a Reuters survey on Wednesday showed OPEC oil output is likely to fall for a third straight month in March. The UAE reduced its oil production by nearly 200,000 barrels and that pushed the OPEC compliance to 95%.  

Brent may remain well bid during the day ahead, courtesy of a bullish inventory report and OPEC compliance, although Friday’s Baker Hughes report, if shows a jump in rig counts, could derail the rally. 

Brent technical Levels

Brent was last seen trading around $52.34/barrel. A break above $52.62 (Mar 16 high) would expose $53.60 (Oct 1 low). On the other hand, a breakdown of support at $52.14 (Mar 17 high), under which the losses could be extended to $51.58.