April 08, 2024 [Daily FX]- OPEC MAINTAINS Q2 SUPPLY POLICY, US STORAGE DIPS
OPEC met this week with the organization largely expected to stick to the prior agreement for oil supply in Q2. Numerous officials, who wished to remain unnamed, were cited by Reuters in the lead up to the meeting that took place online on Wednesday.
In addition, US stocks declined in the week ending 29 March to help spur on the rising oil price.
However, much of the headlines this week revolved around the latest Israeli attacks which killed several aid workers and caused renewed outrage from global leaders. The UAE warned of a ‘cold peace’ if the current state of affairs continues.
President Biden demanded that immediate aid be allowed to reach citizens in Gaza and strongly urged President Netanyahu to protect citizens. The US Secretary of State Anthony Blinken was rather direct on the matter, stating, “if we don’t see the changes that we need to see, there will be changes in our policy.” It appears that Israel’s strongest ally is finding it increasingly difficult to support the recent turn of events and lack of relief for ordinary citizens.
The oil market has risen in response to the elevated tensions and threats of an Iranian response after Israel targeted the Iranian embassy in Damascus. In addition, the oil demand outlook appears robust after OPEC made no further alterations to its forecast and major economies witnessed some encouraging PMI numbers.
BRENT CRUDE OIL HITS $90 BUT STRUGGLES TO PUSH FORWARD AHEAD OF NFP
The longer-term bullish recovery shifted into another gear after finding support a little over a week ago at $85. Yesterday, Brent prices soared well over $90 a barrel, finding momentary support at the 38.2% Fibonacci retracement of the major 2020-2022 rise.
After such a sharp advance it would not be surprising for oil prices to moderate and even pullback over the short-term now that oil has entered overbought territory on the RSI. Immediate support lies at trendline support (former resistance) and $89 thereafter. A hold above $89 maintains the bullish outlook.
WTI CONQUERS $86, AS BULLISH MOMENTUM WANES AHEAD OF NFP
WTI prices rose above $86 yesterday and remain rather elevated in the moments before the NFP report. $85.90/$86 is the most immediate level of interest with the prospect of a pullback towards the ascending trendline (former channel support) a reality at such overbought levels.
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