On Wednesday, oil fall 0.55% from $48.68, after U.S. crude oil inventory last week increased by 4.5 million barrels, to 448.8 million barrels, marking the ninth month building up, report released by Energy Information Agency (EIA).
Looking in the D1 chart, oil hit hard support at $47.27 and then rebound, closed at $48.41.
Today, oil resume on dropping 0.66% from $48.37, traded at $48.05 in 11:00 a.m. GMT+7. Oil production of U.S. last week increased to 9.37 million barrels per day. And OPEC showed no sign of cutting its benchmark production even after the upcoming meeting on March 18th, the glut of oil continues dominating the global market. Oil price could slide further.
Considering the decreasing 41% of the oil rigs since December 2014 and big cut in labor force and capital from energy sector, physical production may begin to fall, relieving the oversupplied situation.
At the same time, U.S. refineries has come back to work after a period of maintenance, February capacity of these factories is 15.1 million barrels per day and is predicted to be extended in 2015. Also China started to 2 new refineries so they will need importing more crude for plan working. Oil import of China in February reached 6.69 million barrels per day. Oil demand may be improved.
Oil may retest the support $47.27 one more time and then go up.