Oil storms higher
Crude is having a bounce back day.
WTI tumbled to a six-week low yesterday in a 7% decline but it’s recovered most of the decline today, rising by $2.67 to $60.40, or 5%.
Technically, it breached the 55-day moving average yesterday for the first time since November but the strong rebound today despite a slight dip below that and the mid-Feb low is a positive sign. To generate any real kind of momentum though, or even to confirm a period of consolidation, it needs to get back above $61.90.
On the fundamental side, US weekly inventories were higher than anticipated but the small dip that caused in oil prices was quickly reversed. The ship blocking the Suez canal is backing up oil traffic but is expected to be cleared today or tomorrow.
Looking further out, the next OPEC meeting is coming quickly on March 31 and April 1. The latest dips in oil prices will likely make ministers more cautious and ensure an extension or the current policy, or only a small increase in supply in May.