Crude oil prices staged a strong rebound this Wednesday after a slew of positive fundamentals for the black gold hit the market.
A ship ran aground in the Suez Canal, sparking fears that crude shipments could get clogged up along the vital shipping route and lead to supply shortfalls. Also, crude oil inventories fell from 2.4million barrels registered last week to 1.9million barrels, according to the latest crude oil inventories report from the Energy Information Administration (EIA). Germany has also pulled plans for stricter lockdowns, easing demand fears from Europe. Analysts are also seeing the OPEC+ alliance holding steady on current quotas in their next meeting in April.
With less than 1-week to the April 1 OPEC + meeting which will review the current production quota for members of the cartel and its partners, Reuters is quoting an OPEC source as saying that there would be no surprise if OPEC tilts towards the side of caution to maintain current production levels, rather than act to increase supply. The same source was also quoted by Reuters as saying that any production increases “could jeopardize” previous gains in managing the market.
Crude oil price on the Brent benchmark gained strongly on these factors, adding 5.93% to completely reverse the previous day’s steep loss.
Technical Levels to Watch
Today’s gains have allowed crude oil price to hit resistance at 64.26, which is also the site of the trendline that now acts as resistance as a result of role reversal.
If bears interpret this as a pullback that makes Brent crude cheaper, then we could see new shorts that send price towards 62.21 initially, with 60.07 and 57.47 as the additional downside targets.
On the other hand, a break above 64.26 allows bulls to push towards 65.95, with 66.81 and 67.74 also forming additional targets to the north.
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Crude Oil Price; Daily Chart
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