- Oil prices surge as countries and various states ease lockdown restrictions
- Crude oil prices could hit $43 per barrel by end year
- Near term, resistance could be at $30
On Tuesday, oil prices surged on optimism of recovery of global oil demand as various Asian and European countries as US states begin to lift coronavirus lockdowns.
Crude oil demand could grow following the lifting of COVID-19 lockdowns
Crude oil received support from the sentiment of production cuts kicking in as OPEC members take steps to slash productions. However, Ryan Sitton, State Railroad Commissioner who pushed for the cuts, has abandoned the proposal after failing to receive support from other commissioners. The sentiments of Sitton come a day before Texas, which is the largest oil-producing state in the US, votes on the oil production cuts.
With various countries easing lockdown restrictions, demand will likely grow in the third quarter to offset the oversupply that has been experienced in recent weeks. UBS analyst Giovanni Staunovo has predicted that Brent oil will recover towards the end of the year with targets of $43/barrel, and by mid-2021, it will be $55 per barrel. Staunovo indicates that the outlook is promising, and the recovery of the global economy will support demand for oil.
Crude oil analysis
WTI crude jumped 11.2% to $22.68/barrel making it four consecutive sessions of gains. On the other hand, Brent crude was up 7.2% to $29.17 per barrel. As at the time of writing crude oil prices are up 16.48% at $23.75 per barrel
Crude oil prices are up above $20 per barrel, and it seems they will continue respecting the uptrend in the coming weeks as sentiment continues to improve. For now, crude oil is offering support at $17.52/barrel, which is somehow below the current daily range of the market. The market seems to have recovered from the April lows by topping at $21.76, and for bulls, they might try resistance at around $30.
Time : 05-05-2020
Pivot : $20.62
Technical View : Long above $20.82
Comments : Weak Bullish sentiment
Last Price : $23.68