Crude Rises Sharply Helped By Buoyant Equities

Oil prices rose sharply on Monday boosted by the risk rally in equities during the European/US sessions. Traders continue to cover shorts from earlier in the month following the OPEC meeting. Crude is now over 4% higher in June and WTI is at levels last seen at the end of April. The USD index was slightly lower.

• WTI rose 2.8% to surpass $80 and make a high of $80.66/bbl to be up 4.7% this month. It has started today slightly lower at $80.51. It reached a low of $77.98 at the start of European trading. The benchmark broke through resistance at $79.32 and key resistance at $80.62 briefly. A clear break of the latter would cancel the bear theme.
• Brent is up 2.2% to $84.41/bbl after reaching a high of $84.55. It is now 4.1% higher in June. It breached the 50-day EMA at $82.51 and resistance at $83.34. The next level to watch is $84.72, May 29 high and key short-term resistance.
• Data showing that China’s refining activity is weak didn’t weigh on oil prices following Monday’s APAC session. Refinery output was down 1.8% y/y, its lowest in 2024, due to maintenance. Narrow refining margins are also weighing on crude processing volumes. The market has been worried about China’s demand for crude.