The global oil benchmark is taking cautious steps higher while push and pull factors are still in play.
Hopes that peak US interest rates is drawing close, coupled with the optimism surrounding China’s economic reopening, are placing Brent on course for a third successive weekly gain.
The prompt spread for Brent is also making another attempt at backwardation – a bullish sign – having been sent into contango – a bearish pattern – for the most part since late November.
Having broken past its 50-day SMA and its upper downtrend line of late, Brent’s ascent is being halted for the time being by its 100-day SMA, with the 23.6% Fibonacci level from its 2022 descent lurking just above.
Brent bulls are being forced to bide their time as recession fears still loom large, despite the hopes for China’s economic rebound while supply risks surrounding Russian output can’t yet be ruled out.
Although OPEC+ is widely expected to keep its output levels unchanged next week, the alliance has demonstrated a knack for springing surprise supply interventions to boost oil prices.
However, if the Fed next week slams home its hawkish message, that may force oil prices to unwind recent gains stemming from fears that central banks are willing to invoke more economic pain, all in the name of subduing still-stubborn inflation.
Brent oil is paring some of its gains this week, having rebounded off the psychologically-important $70 mark. Still, the global oil benchmark appears poised to head into the weekend having registered its first weekly advance in three weeks.
24 March 12:21
The global oil benchmark is endeavoring to pick itself off a 15-month low and trim its largest weekly drop so far in 2023. The outlook for short-term demand has been hit by contagion fears following the Silicon Valley Bank and Credit Suisse banking crises as risk-off appetite and dollar volatility roiled markets.
17 March 12:03
Brent’s climb above its 50-day simple moving SMA proved short-lived, as prices were resisted at their 100-day SMA before hurtling back down towards the psychologically-important $80/bbl mark.
10 March 12:36
At the time of writing, Brent has resurfaced above its 50-day simple moving average (SMA), while also breaking past the upper bound of its downtrend that began since June 2022, as it looks to register back-to-back weekly advances.
3 March 11:28
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