Brent is seeing some slight relief from a technical rebound, after being dragged towards its March lows by recession fears.
The boost from the surprise OPEC+ supply cut has evaporated in the face of unrelenting demand-side worries, made worse by revived fears over more US financial instability.
At the time of writing, the global oil benchmark is still headed for its third straight weekly decline, which would be its longest losing streak since November 2022.
Brent’s recent rebound is unlikely to be sustained as long as negative sentiment continues to cloud oil markets.
Brent may even be dragged into sub-$70/bbl domain if more US regional banks fail, which in turn may amplify the risk of a US recession.
While another OPEC+ supply cut may offer fresh support for prices, Brent’s sustained recovery back into the $80-$90 range has to be predicated on better market fundamentals piercing through the doom and gloom.
Markets are widely expecting that OPEC+ would stand pat on its production levels at its weekend meeting.
2 June 13:21
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
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