Crude oil witnessed more than 4% gain yesterday. It made a day’ high of 5999 and settled at 5978. As disruption of half a million barrels a day of Kurdish supply, nuclear war talk by Russia’s Vladimir Putin and assurances about the crisis-hit U.S. banking sector helped boost risk-on appetite in oil.
An announcement that First Citizens BancShares Inc will acquire deposits and loans of failed Silicon Valley Bank spurred optimism about the condition of the banking sector that has roiled financial markets, which supported oil prices too.
Further, Oil prices also got support from indications of recovering Chinese demand. China National Petroleum Corporation’s Economics and Technology Research Institute (ETRI) released its annual industry outlook on Monday.
Reuters report that key forecasts include:
- China’s crude oil imports will average 10.8 million barrels per day (bpd) in 2023, matching the previous record high from 2020
- Imports will rise 6.2% from last year to 540 million tonnes
- refinery processing will gain 7.8% to 733 million tonnes, equivalent to 14.66 million bpd.
Additionally, American Petroleum Institute (API), an industry group, will publish its inventory data later today and the U.S. Energy Information Administration on Wednesday, both will impact oil prices.
Technical Analysis
Technically, formation of a long bullish candlestick on the daily chart is indicating a bullish momentum in the near future.
Furthermore, Prices trading above 38.2% Fibonacci Retracement and it appears to test next resistance at 61.8% which would be 6090. Above it 6155.00
MACD also gives a positive cross over.
All above the technical aspects is creating a probability for positive momentum.
On the downside, immediate support is seen at 5940 below it 5820.00