Brent crude oil price extends gains and makes two-week highs as the demand for oil recovers faster than expected while the commitment of OPEC countries to meet the supply cut commitments also boost the price. The price is higher for the sixth consecutive session as the selling pressures absorbed during the trading sessions and managed to return to positive territory.
Selling pressure during the week came after the API reported that U.S. crude oil inventories rose by 3.9 million barrels for the week to June 12 to 543.2 million barrels, the estimates were for a fall of 152,000 barrels.
Meanwhile, the International Energy Agency raised the full-year crude oil demand forecast to 91.7 million barrels per day after the U.S. retail sales posted a record jump in May. OPEC previous forecast for global oil demand was at 9.07 million barrels per day.
Rystad Energy, a Norwegian energy research firm in its annual report estimates that the recoverable oil resources, the volume that could be extracted, given the constraints of technology and demand has fallen the last year by 282 billion barrels to 1.9tn barrels, as oil companies abandon exploration plans due to a sharp drop in demand. The proven reserves of Saudi Arabia, come to 267 billion barrels.
The Brent crude oil price is 2.56% higher at $42.53, making consecutive higher highs and higher lows, enhancing the bullish momentum that started after oil price tested the 100-day moving average and managed to bounce. What can cancel the recent bullish momentum is a break below the 100-day moving average at 37.46.
On the upside, crude oil price resistance stands at $42.87 the daily high. If the crude oil price breaks above $42.87, the next supply zone will be met at $45.45 the high from March 9 trading session. Next resistance for black gold stands at $50.07 the 200-day moving average.
On the flip side, first support for Brent crude oil is at $41.47 the daily low. Next support for Brent crude oil price will be met at $39.77 the low from June 18 trading session. If the Brent oil price breaks lower, the next support stands at $37.46 the 100-day moving average.