Brent crude oil price trades higher after Saudi Arabia announced that it would deepen production cuts in June to support oil price that plunged to record lows on April as the global demand for fuel collapsed. Saudi Arabia has cut it’s oil production by 7.5 million barrel’s per day almost 40% lower form April production. Above that Kuwait and UAE, said that they would cut output by 80,000 and 100,000 barrels per day, respectively.
WTI crude oil futures for June are adding 5.30% at $25.42 per barrel as New York state plans to reopen some businesses by Friday. Fuel demand expected to rise as more and more people returning to their jobs.
Crude oil traders await the API data scheduled to be released later on the day, with analysts expecting an increase by about 4.3 million barrels in the week ending May 8. The Energy Information Administration (EIA) reported the previous week that U.S. crude inventories rise by 4.6 million barrels. Baker Hughes reported on Friday that the number of operating oil and gas rigs fell to 74 in the week to May 8, the lowest level since 1940.
The Brent crude oil price is 2.21% higher at $30.59 as the consolidation phase around the $30 mark continues for the fifth consecutive session. Brent crude oil price has gained over 95% since the April 22 lows. But now the price has stalled at the 50-day moving average resistance. The technical outlook for Brent crude oil remains bearish below the significant daily moving averages. A credible break above the 50-day moving average would provide a buying signal.
On the upside, Brent crude oil price initial resistance stands at $30.66 the daily top. If the oil price breaks above $30.66, the next resistance will be met at $32.24 the high from May 6 trading session. Next supply zone stands at $33.23 the high from April 13.
On the flip side, the initial support for Brent crude oil price is at $29.58 the daily low. Next support for oil price will be met at $29.04 the low from May 11. The low from May 4 at $25.61 will provide the next support zone.