Prices Off Highs But Stabilised

Oil prices couldn’t hold onto Thursday’s gains but still finished moderately higher. The market is significantly concerned about oversupply and lacklustre demand and so any rallies were unsustained. The weaker dollar was only able to provide a floor (USD index fell 0.6%). The market is likely to be waiting now for US payrolls out later today.

• WTI closed 0.4% higher at $69.64/bbl. They rose above $70 during the European session and reached a high of $70.48 but then fell to $68.80, clearing support at $69.09, July 3 low. It is now down 10.5% since November 29, the day before the OPEC announcement. Trend conditions remain bearish.
• Brent finished 0.2% higher at $74.44 but is down 10.2% since November 29. It rose above $75 earlier to make a high of $75.48 but then fell below $74 to $73.60, above support at $73.50, July 6 low. According to Bloomberg, its relative strength index is signalling that it’s oversold.
• With traders unconvinced that the latest OPEC+ output cuts will tighten the market or be complied with, the Iraqi Deputy PM for Energy Affairs voiced his country’s commitment to the voluntary reduction in quotas. A number of countries have done the same this week.
• On the demand side, China’s crude imports fell 13.3% in November, which given it is the world’s largest importer worried markets.