Crude Oil News Today: Rising Brent Prices Indicate Bullish Short-term Outlook

Oil Market Rallies on OPEC+ Cuts, Russian Supply Concerns

The oil market experienced a significant upswing on Thursday, propelled by OPEC+’s production stance, disruptions in Russian energy infrastructure, and a decline in the U.S. rig count.

On Thursday, Light Crude Oil Futures settled at $83.17, up $1.82 or +2.24%.

Supply Tightening and Price Increase

Brent crude futures soared, achieving their highest level since October, largely due to OPEC+’s decision to maintain production cuts. SEB analyst Bjarne Schieldrop stated, “We … expect U.S. inventories to rise less than normal in reflection of a global oil market in a slight deficit,” indicating a bullish outlook.

Inventory Trends and Market Reaction

Despite a temporary rise in U.S. crude and gasoline inventories, the market’s response was positive. Analysts noted that the increase in stocks was less than typically expected for the time, suggesting a market tightening. Schieldrop’s analysis suggests this could support Brent crude prices moving forward.

Economic Growth Fuels Demand

The U.S. economy’s growth rate exceeded expectations, pointing to robust energy demand. Jim Ritterbusch of Ritterbusch and Associates highlighted, “The strength in the stock market suggests strong forward earnings that are, in turn, hinting at a surprisingly strong US economy conducive toward better than expected energy product demand.”

Interest Rate Decisions Impacting Oil Market

Anticipation of interest rate cuts by key central banks is influencing the market. JPMorgan analysts commented, “The market is converging on a June start to cuts for both the Fed and the European Central Bank.” Lower interest rates typically support oil demand.

Short-term Market Forecast: Bullish

In the short term, the oil market outlook is bullish. The combination of OPEC+’s ongoing production cuts, geopolitical tensions in Russia, and strong economic indicators from the U.S. suggest higher prices ahead. “This will likely hand support to the Brent crude oil price going forward,” says Schieldrop. Market observers should closely follow OPEC+ policy decisions and global geopolitical events, as these factors are key to the market’s direction in the near future.

Technical Analysis

Light Crude Oil Futures settled at their highest level since October 27 on Friday, reaffirming the uptrend. Traders have now set their sites on the October 20 main top at $89.49. A trade through $80.30 will change the short-term trend to down.

Traders should also note that the 50-day moving average or the intermediate trend indicator, crossed to the bullish side of the 200-day moving average, the long-term trend indicator. This makes $77.38 and $77.24 the major support.