Oil Bulls Take Control, Energy Market Moves Closer to Rebalancing

At the time of drafting this report, the British-based oil contract traded at $67 a barrel posting gains of about 36 basis points, and the West Texas Intermediate futures recorded gains of about 31 basis points to trade around $64 a barrel.

Oil traders are currently digesting reports that OPEC+ will gradually increase their current oil production from next month to July on the basis that crude oil demand growth is expected to reach 6 million barrels per day for 2021.

The Organization of the Petroleum Exporting Countries and its allies also anticipated crude oil inventories globally to peak at 2.95 billion barrels in three months’ time, below the average level recorded between 2015 to 2019.

Such macros gave Brent bulls enough gas in breaking far above the $65 a barrel price levels despite the deadly virus disrupting key economic hubs.

Energy experts anticipate the present state of crude oil stockpiles globally reveals that energy demand is picking faster than the oil cartel group had earlier envisaged, suggesting oil bulls might have enough ammunition in breaking above $70 a barrel before the end of Q2 with the continual weakening of the dollar.

Consequently, recent price actions suggest Crude oil bulls are moving with clear positivity trading far above the critical support level of $65 enforcing expectations that the bullish trend in the world’s most liquid commodity derivative market remains in play, with the next target located at $69.50- $70.50 noting that breaching such level will push the price to $72.50 as a next station as propelled by recent impressive economic data from the U.S. and mainland China.