Brent crude oil price trades higher for the eighth consecutive trading session making fresh three and a half month highs ahead of the American Petroleum Institute’s weekly inventory report which will be reported later on the day.
Two are the main reasons that drive the crude oil price higher. First is the reopening of the economies and the rise in global demand as transportation and travelling started again in many countries. The second reason is the commitment of the OPEC+ countries to the extension of the production cuts that agreed on April. OPEC countries and Russia agreed to cut crude oil production by 9.7 million barrels per day, almost 10% of global production output and extended the cuts for an extra month till the end of July.
A threat to the crude oil price is the rising number of new coronavirus cases that reported in many states. While a rise in trade tensions between China and USA will also weigh on the crude oil prices.
The Brent crude oil price is 1.98% higher at $43.83 as the positive momentum accelerated above the 100-day moving average. Crude oil is making consecutive higher highs and higher lows. A signal that bulls need to pay attention is that the Relative Strength Index 14 is entering the overbought area, and a sharp correction can’t rule out.
On the upside, crude oil resistance stands at $43.92 the daily top. If the crude oil price breaks above $43.92, the next supply zone will be met at $45.45 the high from March 9 trading session. Next resistance for the Brent crude oil stands at $49.90 the 200-day moving average.
On the other side, immediate support for Brent crude oil is at $42.19 the daily low. Next support for Brent crude oil price will be met at $40.98 the low from June 19. If the Brent oil price breaks lower, the next support stands at $37.24 the 100-day moving average.