Oil Remains Above 60 USD Amid Recovery Hopes
WTI (West Texas Intermediate) oil is still defending the medium-term uptrend as it rose again above the important 60 USD threshold.
OPEC (The Organization of the Petroleum Exporting Countries) and the IEA (International Energy Agency) upgraded their forecasts last week, for world oil demand growth this year.
In other news, data and analytics company GlobalData reported that as many as 100 oil and gas projects are set to start in Nigeria by 2025. They will account for 23 percent of all projects started in the industry in Africa within the next five years. The energy sector is indeed expecting a robust economic recovery, leading to a rise in global demand.
That said, oil has been rising recently, helped by signs of robust recoveries in both the US and China, the two largest oil consumers in the world. The throughput of Chinese refineries last month averaged 14.08 million BPD, up 19.7% yearly thanks to the recovery in demand for fuels.
“Supply discipline and rebounding economies are set to give oil a chance to break out of the recent range,” Goldman Sachs analysts said in a report. “We remain positive on Brent oil forecasting 80 USD per barrel in the third quarter of 2021 on a near-term demand recovery and supply discipline,” they said.
Technically speaking, the short-term support seems to be in the 61.10 – 61.80 USD, where the 8 and 21 EMAs are located. Then the next level to watch is at the mentioned 60 USD barrier.
On the upside, oil is now trying to breach a stronger resistance of 64 USD, and if successful, it could rally toward the actual cycle highs at 68 USD.
Lastly, US yields seem to be topping, which undermined the greenback against other major currencies. A weaker USD is usually bullish for commodities, such as metals and oil.