Crude Continues Unwinding Oversold Stance

Oil rose further on Monday as risk sentiment remained positive and recession concerns continue to be in the background following solid US payrolls. WTI was up 2.1% and is now trading around $72.93/bbl and Brent rose 1.7% and is $77.01. The USD index was 0.2% higher.

• Initial resistance for WTI is at $73.93, the April 28 low. Despite the recent move up, WTI futures remain bearish. The trend condition was oversold last week, which is also supporting the current rally as fundamentals are positive. Key support is at $64.58, the March 20 low. A break of this would confirm the resumption of the broader downtrend.
• Wildfires in Canada have resulted in oil and gas installations being shutdown, reducing oil supply by 150kbd.
• On the demand side, Bloomberg is reporting that the quantity of crude on stationary tankers globally is down to its lowest since mid-February based on Vortexa data. Also, refining margins have started to rebound, indicating improved demand conditions.