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Brent crude oil futures stabilized higher last week, but the limited trading range suggests that buying could slow down. Earlier this week, prices reached their highest level since November, as a result of the turmoil in Libya and the production cuts announced by OPEC and its allies, as well as US sanctions against Iran and the United States. Venezuela. However, renewed concerns over rising inventories and production in the United States, as well as worries over the global economic slowdown, have kept prices down.
For the week, the June WTI crude oil was established at $ 64.02, up $ 0.87 or + 1.38% and crude oil in June Brent closed at $ 71.55, up $ 1.21 or up 1.69%.
Mixed bag of news
On Wednesday, the Energy Information Administration announced that US crude inventories had reached their highest level since November 2017. In addition, US crude output remained at a record 12.2 million barrels per day. US gasoline inventories fell by 7.7 million barrels last week, however. That was more than enough to offset crude oil construction.
At the same time, the International Energy Agency (IEA) announced that OPEC production had dropped by 550,000 b / d. The IEA also said US sanctions and power outages pushed OPEC member Venezuela's crude output to its long-term low of 870,000 b / d, even lower than the one announced by OPEC the day before.
Prices dipped on Thursday as traders continued to react to rising US inventories. The price action, however, suggests that the sale was fueled by technical factors.
On Friday, WTI and Brent crude oil were supported by stronger export data than expected from China. Exports to China rose 14.2% in dollars last month, nearly double what economists expected. However, the news was not strong enough to bring the markets to new heights.
The number of fixtures goes up
Energy services firm Baker Hughes said Friday that the number of active oil rigs in the United States had increased from two to 833 last week. This followed an increase of 15 oil rigs the previous week.
Funds continue to create long positions
Monetary managers lifted their net positions on futures and options on US crude over the week until April 9, the Commodity Futures Trading Commission (CFTC) said on Friday.
Weekly forecasts
The support has been strong because the supply is tightening. This is supported by actual data on the offer. Concerns about demand are only speculations. Earlier in the week, Bernstein Energy said in a note: "We believe global demand will post additional growth of 10 million bpd, of which more than half will come from China."
In addition, "While global fears of a difficult economic landing may be exaggerated, the risk of global oil demand concentration (in Asia) remains underestimated," said RBC Capital Markets.
The Chinese economy is probably the key to future demand. Traders are not as bearish on the Chinese economy as they were near the beginning of the year. Indeed, an agreement to end the trade dispute between the United States and China seems imminent, and the Chinese government has made huge amounts of stimulus available to keep the economy afloat. .
Markets may seem very heavy, but sales pressure does not come from supply, although the increase in production in the United States remains a concern. The problem may lie in the price action. With the recovery of nearly four months around the main areas of technical resistance in major markets, speculative buying seems a bit rare, as investors are forced to decide whether to continue buying new forces or to return to a support zone. or value.
Essentially, buyers may face a risk related to the strength of their purchases or "conquering the market" with an increase of nearly 120 days after a trough and at current price levels. This could lead to a short-term correction, but I do not think the long-term trend will change.
Holdings above $ 63.48 indicate significant purchases in the WTI futures market in June. If you fall below it, it will probably create a remote business. June Brent will grow to $ 71.77.
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