Crude Continues Moving Higher, WTI Holds Above $81

Oil prices continued their march higher during APAC trading following Sunday’s OPEC+ output cut announcement. They are now about 7% higher than Friday’s close but are off this week’s highs. Brent is up 0.5% today to $85.36/bbl and WTI +0.4% to $81.06. Brent reached a high of $86.44 early on Monday and WTI of $81.81 on Tuesday. The USD index has been flat on Wednesday.

• Both Brent and WTI are now above their 200-day moving averages and up 17.3% and 21% from their March lows. The move was driven by a weaker dollar, stabilisation in the banking sector, supply measures and continued optimism on China demand. Watch resistance at $81.74 for WTI and $86.44 for Brent.
• The market has also been supported by the API reporting a crude drawdown of 4.3mn barrels in the latest week, according to Bloomberg citing people familiar with the data. A reduction in US stocks would be another factor weighing on supply. EIA data is published later.
• There are no Fed officials scheduled to speak today. But there is some important data with US ADP March employment forecast to rise 210k, and the trade deficit for February expected to widen slightly to $68.8bn. March ISM services is projected to ease to 54.4 from 55.1 and the prices paid component is likely to be watched closely, while the S&P Global services and composite PMIs are forecast to be stable at February levels.