Shortly after the OPEC+ shocker earlier this month, we published this article on April 4th, bearing this title: “Brent due for technical pullback after OPEC+ shocker?”
That technical pullback finally played out this week, unwinding all of oil’s gains from the surprise OPEC+ decision to lower its output by over 1 million barrels per day (bpd) starting next month.
Despite the better-than-expected China GDP prints at the onset of the week and the latest drawdown in US stockpiles, this global commodity was still weighed down by demand-side fears which were only stoked by the Fed’s Beige Book which pointed to stalling US economic momentum.
At the time of writing, Brent is attempting to rebound after dropping close to the psychologically-important $80/bbl mark.
However, Brent it remains below its 50-day and 100-day simple moving averages (SMA) and is on course for its first weekly drop in five weeks, while sticking to the downtrend that began in Q1 2022.
Perhaps more importantly for OPEC+, this global oil benchmark is still back within that $80-$90/bbl range that Brent had previously adhered to in the months prior to the SVB/Credit Suisse crisis.
Even though the incoming OPEC+ production cuts are set to support Brent prices within this $80-$90/bbl range, oil bulls must also overcome concerns over a global recession in order to fulfill forecasts for $100 later this year.
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
There's a better website for you
A new exciting website with services that better suit your location has recently launched!
Sign up here to collect your 30% Welcome Bonus.