- The US is expected to use export restrictions to ease domestic fuel prices.
- Last week’s crude oil inventories are expected to drop.
- India’s oil minister says $110 a barrel is unsustainable.
There have been minimal movement for crude oil futures (CL) prices in the past two days as investors are waiting for crude oil inventory data from the US to tell the demand story. Prices have also been affected by the possibility of Joe Biden using export restrictions to ease domestic fuel prices that have been on the rise.
Russia’s invasion of Ukraine has seen oil prices soar, with Brent hitting $139 in March, the highest since the 2008 financial crisis. If the war continues, we will likely see higher prices, as supply will only worsen. On Monday, Germany’s economy minister said that the European Union could agree to ban Russian oil imports within days.
Investors are expecting crude oil inventories in the US to drop, and the upcoming Memorial Day weekend could see an increase in travel. Despite the high fuel prices, this increase could be because of people looking to shake off the coronavirus lockdowns.
Oil demand is still threatened by the weakening global economy, keeping prices down. On the other hand, China’s reopening might see demand ticking up as Shanghai is due to open up in a little more than a week. All this is pushing prices higher and, at the same time, pulling them lower, causing prices to consolidate.
In his address to the World Economic Forum on Tuesday, India’s oil minister, Hardeep Singh Puri, said that crude oil prices of $110 a barrel were not sustainable. This price fuels inflation and slows economies as they try to recover from the pandemic. Puri insisted that the world was facing an energy price crisis.
Crude oil futures (CL) technical forecast:
The 4-hour chart shows crude oil currently trading sideways between 103.27 and 115.63. The past two days have also seen minimal momentum as the commodity stuck to the 30-SMA. Since the price consistently makes higher highs and higher lows, we might see the move towards the upper side of the range near $115.00.
However, there is still a battle between bears and bulls in this market, as shown by the RSI. However, the value is above 50.00, indicating a bullish bias.