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Technicals Bearish But Market Likely To Tighten In H2

OIL

Oil prices rose over 0.5% but haven’t broken key round-number levels. WTI rose 0.5% to $69.53 but has started the APAC session slightly lower at $69.41/bbl. Brent rose 0.7% to $74.36. Prices were also supported by the weaker dollar with the USD index down 0.1%.

  • There was an early reaction on Monday to the unrest in Russia but crude markets discounted it over the rest of trading as it is unlikely to cause any disruption to supply. The outlook for China’s economy, possible further Fed rate hikes and growth in Europe remain the key concerns. But the American Automobile Association has estimated that the miles driven this holiday weekend will be 4% higher than 2019.
  • WTI broke through $70 a number of times on Monday but couldn’t sustain it. The intraday high was $70.11. Resistance is at $72.72, June 21 high, and support is $66.96, June 12 low. Technicals remain bearish. Brent approached $75 but reached a high of only $74.85. Resistance is $77.24, June 21 high, and support $71.50, May 31 low.
  • Bloomberg is estimating that the oil market deficit could be around 2mbd in H2 2023. This and any inventory drawdown could be supportive of prices later in the year.
Energy BulletsCommodities
Energy BulletsCommodities

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