Brent crude oil has been on the rise following voluntary production cuts by Saudi Arabia and Russia to stabilize the oil market. Despite uncertainty around global economic growth, Brent prices have increased by over 27% since July. This surge in prices is supported by strong oil demand and reduced inventories.
On the weekly chart, it is evident that the recent rise in prices is significant, but it pales in comparison to the rebound following the COVID-19 pandemic and the Russia-Ukraine war. Currently, oil prices are testing $95.60, but signs of fatigue are emerging on the daily chart. Confirmation through a close on the daily candle is needed to assess potential bullish fatigue.
Being aware of the fundamentals that influence commodity prices is crucial in understanding the oil market. The tight supply of oil and robust global demand contribute to the bullish trend. Inventory levels remain low, further supporting the upward momentum.
Pullback from Intra-Day High Suggests Possible Resistance at $93
WTI oil experienced an intra-day pullback from its daily high, indicating a possible resistance level at $93. It is important to wait for a candle close before making further assessments. Despite the pullback, prices are still up for the day, and the fundamental landscape continues to favor upside potential.
The upcoming FOMC meeting may impact the bull trend. While the Fed is expected to keep rates unchanged, updated quarterly forecasts and GDP growth projections will be monitored by oil market participants. The US GDP has shown remarkable recovery, but other developed economies are struggling with low or zero growth.
Overall, Brent crude oil is approaching the $100 mark, supported by reduced inventories and strong demand. WTI oil is experiencing a slight pullback but remains in an upward trend. The oil market continues to be influenced by fundamental factors and global economic conditions.
Sources:
– TradingView charts, prepared by Richard Snow