US gasoline futures rose to $2 per gallon, reaching their highest level in two weeks. Investors are assessing mixed signals about supply levels and the impact of global tensions on oil prices.
The American Petroleum Institute (API) recently reported that gasoline inventories decreased by 2.48 million barrels. This decline supports higher gasoline prices.
However, the Energy Information Administration (EIA) announced that gasoline stockpiles increased by 2.05 million barrels for the week ending November 15. This build exceeded the expected rise of 1.62 million barrels, easing concerns about supply shortages.
In addition, US crude oil inventories grew by 545,000 barrels, surpassing forecasts. This aligns with predictions of a possible surplus in 2024 due to weaker demand from China and record-high production levels. This surplus is putting downward pressure on crude oil prices.
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Gasoline Set to Consolidate Amid Oversold Conditions
Looking at the 4-hour chart, we notice the commodity in discussion is oversold as the Stochastic oscillator hovers below 20. This means Gasoline prices could consolidate before the downtrend resumes. As of this writing, Gasoline trades at approximately $2.0, bouncing off the $1.99 immediate support.
From a technical perspective, the bearish trend will likely resume if sellers push the Gasoline prices below the immediate support. In this scenario, Gasoline could dip to the October low at $1.94.
Please note that the immediate resistance is at the 50% Fibonacci retracement ($2.02). If prices rise above $2.02, the downtrend outlook should be invalidated. If this scenario unfolds, the current uptick in momentum can potentially extend to the 78.6% Fibonacci resistance level at $2.06.