Crude At Multi-Month High On Lower Supply & China Optimism

Oil prices rose over 2% on Monday due to signs that the market is tightening and plans to support China’s economy following the Politburo meeting. WTI rose 2.4% to $78.92/bbl, the highest in three months. It is currently around $78.85. Brent is 2.2% higher at $82.85. The USD index rose 0.3% helped by weak European PMI data.

• WTI reached a high of $79.28 during the NY session and cleared resistance at $77.38 which has opened up $80.05, April 18 high. Brent peaked at $83.16 and cleared both $81.75 and $82.06 with $83.77, April 19 high, the next resistance level.
• There are now signs that announced output cuts are taking effect with shipping data showing that OPEC+ shipments are lower including Russia where exports are at a 6-month low. Production is also down in Nigeria and Kazakhstan. But the UAE oil minister has said that current output quotas are appropriate to balance the market but OPEC decisions seem to depend on Saudi Arabia’s view of the market.
• There is an outage at the US Baton Rouge refinery, which will impact gasoline supply and thus prices as demand increases for the summer.