Brent crude oil price trading lower for the second consecutive session, but still keeping the positive momentum alive. Black gold on Friday managed to reverse heavy losses showing that buyers are betting on fast recovery of global demand as more and more businesses reopening.
Energy Information Administration EIA predicts that US crude oil production will average 11.7 million barrels/day this year and 10.9 million barrels per day in 2021, which is lower by 0.5 and 1.3 million barrels per day. OPEC forecasted the worst demand contraction in the second half of 2020 by 9.07 million barrels per day. On the supply side, non-OPEC supply in 2020 is expected to see a deep contraction of 3.5 million barrels per day mainly in Russia, US, and Canada and OPEC production cut of 9.7 Russia until June 2020.
Analysts warned that the recovery in physical demand might halt the supply cits by many countries and we might experience a pullback in the Brent crude oil price.
The Brent crude oil price is 0.74% lower at $35.06 as the correction from 10-week highs continues. However, the rebound from April lows continues helped by fundamentals as the demand recovers. Brent crude oil price registered 127% gains since the lows on April 22. The technical outlook for Brent crude oil has improved in the short term, but the longer-term picture remains bearish as the crude oil price trades below the 100-day moving average.
On the downside, the first support for Brent crude oil price is at $34.47 the daily low. Next support zone for crude oil price will be met at $33.71 the low from Friday’s trading session. Next support stands at $30.83 the low from May 15.
On the other side, Brent crude oil price first resistance stands at $35.42 the daily high. If the crude oil price breaks above $35.42, the next resistance will be met at $36.91 the high from May 21 trading session. Next hurdle stands at $41.95 the 100-day moving average.