Crude oil price has remained afloat after moving past the important resistance level of $70 on Tuesday. Brent futures were up by 0.14% while WTI futures rose by 0.63% as investors digested details of OPEC+ ministerial meeting on Tuesday. The alliance presented an upbeat oil demand outlook. It highlighted its commitment to gradually increase oil production until July. However, it did not provide details of its moves after the stipulated period.
With reference to the recovery of global oil demand, IEA’s Executive Director Fatih Birol has indicated that it will strengthen further within the next six months. In an interview with Bloomberg, the IEA official stated, “Looking at the next six months, I see very clearly the strong recovery of oil demand.” He noted that with the ongoing economic recovery in regions like China and Europe, coupled with the current production schedule by OPEC+, there is likely to be a widening gap between oil supply and demand.
Later in the day, crude oil price will be reacting to the weekly US oil inventory data from API. In the prior release, the stockpiles dropped by 0.439 million barrels compared to the forecasted fall of 1.279 million barrels. However, it was better than the prior increase by 0.620 million barrels.
Crude oil price technical outlook
At the time of writing, Brent futures were up by 0.14% at 70.70. It is on a rebound after dropping from an intraday high of 71.32 to a low of 69.92 in the previous session. On a two-hour chart, it is trading above the 25 and 50-day exponential moving averages. After moving past the upper border on Tuesday, crude oil price is back within the ascending channel. Based on these indicators, it is likely to record additional gains.
I expect crude oil price to find some resistance at 71 while finding support at 70.50. Subsequently, it is likely to surge to its next target at 72. On the flip side, it may pull back to find support at 70 before rebounding.