Brent is on course for a weekly gain, as the global oil benchmark attempts to unwind last week’s losses.
Still, Brent is set to meet head on with the immediate resistance level which is the 50-day simple moving average SMA).
Oil bulls are hoping that signs of cooling US inflation would help alleviate demand-side fears, especially if the Fed can let up on its demand-destroying rate hikes.
Amid reports that China’s oil consumption is set to reach a record high in 2023, such optimism must sustainably feed through into market sentiment in order for oil prices to break out of the downtrend that began since mid-2022.
In other words, more Brent gains are likely contingent on the further economic reopening of the world’s top crude importer, barring any supply interventions by the likes of OPEC+.
Brent’s prospects of breaking above its 50-day SMA immediate resistance may well require a fundamental catalyst, though such a price move could then see Brent’s next resistance around its 100-day SMA coming into play.