Brent oil is pulling away from its mid-week peak, unable to hold recent gains despite Thursday’s weaker US dollar in light of that larger-than-expected drop in US producer prices.
OPEC’s bullish report yesterday that pointed to a widening deficit later this year also failed to preserve Brent at this week’s cycle high above $87.
Note however that Brent’s 14-day relative strength index is easing lower towards that 60 mark which had typically triggered Brent’s technical pullback in recent months.
It appears that Brent prices are busy clearing some froth after embarking on a 4-week winning streak - its longest weekly winning run since June 2022.
Ultimately, for Brent to fulfill forecasts of $100/bbl, markets must be continuously shown signs that global demand remains resilient, even with the lowered OPEC+ output for the rest of the year.
Should next week’s data dump out of China, as well as the PMI prints for various major economies, show better-than-expected results, that may pave the way for $90 Brent, once the froth has been cleared in the interim.
Although on course for back-to-back weekly gains, oil’s advance for this week was significantly pared after Russia hinted that another OPEC+ supply cut may not be forthcoming at its early June meeting.
26 May 13:57
The global oil benchmark is on course to post a weekly advance of over 3%, ending a run of four straight weekly declines.
19 May 13:27
As mentioned in last Friday’s article, “Brent’s recent rebound is unlikely to be sustained …”. Sure enough, the global oil benchmark is unwinding some of its technical rebound, as demand-side fears continue to fester across markets.
12 May 12:21
Brent’s recent rebound is unlikely to be sustained as long as negative sentiment continues to cloud oil markets.
5 May 11:57
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