Crude & Diesel Near Top of Recent Ranges
May 29, 2024
The energy markets had a strong bounce yesterday with WTI crude oil futures up over two dollars and it settled just under eighty dollars per barrel and this morning is over that level and getting some attention in the news. There is room for a corrective run higher here in the near term. The bulls will need to rally prices over key resistance levels to suggest a longer-term uptrend has begun.
Yesterday’s strong rebound was helped by the thought that OPEC+ will continue with all their production cuts keeping roughly 5 to 6 million bpd off the market.
The reports and thoughts about demand have been hard to pin down. Many traders have been concerned about low demand on the back of a weak economy but as time goes on there appears more traders that despite a negative outlook continue to see the economy chug along and with that has been decent demand offering support to prices.
Crude oil is near the upper level of its recent trading range over roughly the last twenty trading days. ULSD is much the same. Gasoline is more in the middle of its range in the last twenty trading sessions, but all these markets are still well off their last highs, for crude and RBOB in April and for ULSD back in February.
UBS said oil remains a valid geopolitical hedge and it sees Brent crude oil trading at around $87 per barrel by the end of the year. Brent is currently at $84. It expects OPEC+ to extend the current production cuts for at least another three months.