Brent crude oil price started the session lower on Wednesday after oil stockpiles data came in above the expectations. The Energy Information Administration’s (EIA) said yesterday that U.S. crude oil production is expected to fall by 600,000 barrels per day in 2020, a smaller decline than the previous forecast of 670,000 barrels per day. The agency also expects global oil demand to recover by the end of 2021, forecasting demand of 101.1 million barrels per day by the Q4 of next year.
Oil price stabilizes above $43 per barrel at the highest level since the April lows. Hopes of fast recovery of the global economy and the physical demand for crude oil pushed the prices above the $43 mark.
Crude oil price also boosted by the commitment of the OPEC+ countries to the extension of the oil production cuts that agreed on April and kept the supply at low levels. OPEC countries and Russia agreed to cut crude oil production by 9.7 million barrels per day, that is almost 10% of global production output.
Some analysts expect that global oil demand may not return to previous year levels until at least 2025, while there is a possibility that demand would not return to last year’s levels at all.
Crude Oil Price Analysis
The Brent crude oil price is 0.29% higher at $42.98 as the strong rebound from April lows stalled around the $43 mark. The technical picture for Brent oil is positive for the short term although a correction to 37 per barrel can’t be ruled out.
On the downside, the initial support for Brent crude oil is at $42.73 the daily low. Next support for the oil price will be met at $41.16 the low from July 1, trading session. If the Brent crude oil breaks lower, the next support zone stands at $37.24 the 50-day moving average.
On the flip side, crude oil price immediate resistance stands at $43.16 the daily top. If the crude oil price breaks above $43.16, the next hurdle will be met at $44.03 the high from June 23. Next supply zone for the Brent crude oil stands at $48.71 the 200-day moving average.
Brent Crude Oil Price Daily Chart