Brent crude oil price trading higher for the second consecutive session as the physical demand for crude oil rises amid the reopening of the businesses across the globe.
The Energy Information Administration (EIA) reported yesterday that U.S. crude oil inventories fell by 5 million barrels last week, above the expectations for a 1.2 million-barrel rise, while oil stocks at the significant Cushing, Oklahoma, delivery hub dropped by 5.6 million barrels.
OPEC Oil Production Cuts Boost Price
Prices also helped by oil shipping data showing the OPEC, Russia and other oil producers, are complying with their pledge to cut 9.7 million barrels per day that took effect on May 1. International Energy Agency (IEA) forecasts lower global stockpiles in the second half of the year. The IEA now expects crude oil stockpiles to shrink by about 5.5 million barrels per day in the second half of 2020.
The Fed minute released yesterday reiterated the will to use all tools available to support the U.S. economy, which is the world biggest oil consumer.
The Brent crude oil price is 1.20% higher at $36.22, making fresh 10 week highs as the rebound from April lows continues and gains steam above the 50-day moving average. Brent crude oil price is 127% higher since the lows on April 22. The technical outlook for Brent crude oil remains bearish for the long term. However, for the short term, the momentum is positive above the 50-day moving average.
On the upside, Brent crude oil price first resistance stands at $36.70 the daily top. If the crude oil price breaks above $36.70, the next resistance will be met at $38.14 the high from March 10 trading session. Next obstacle stands at $42.62 the 100-day moving average.
On the other side, the immediate support for Brent oil price is at $35.75 the daily low. Next support for crude oil price will be met at $34.57 the low from yesterday’s trading session. Next support zone stands at $32.61 the low from May 18.