Oil gathering momentum as Brent hits new highs
Oil prices are on the rise again on Thursday, with the inventory data from API and then EIA over the last 48 hours merely causing a pause in the rally despite reporting large increases. It would appear traders are far more interested in oil waivers that were granted by the US to eight countries that expire in May, affecting up to a million barrels of oil purchases each day.
While it was reported that the US, Saudi Arabia and UAE will fill the void left by any shortfall, there are serious doubts about how and when this would be achieved. And when you consider the fact that two of the three are currently actively trying to curb output in order to rebalance the market and lift prices, you have to question the motivation to then step in and turn on the taps.
From a traders perspective, this means fresh six month highs in Brent crude, with WTI lagging slightly behind. What’s interesting is that momentum doesn’t appear to be lacking from the latest moves which suggests prices could continue to rise. Brent could face an interesting test around the $75.50-76.25 range, with resistance above here coming around $79-80.