Please try another search
From a fundamental perspective, the rise in oil prices comes down to simply supply and demand.
Crude oil ticked down slightly to start this week’s trade, but the dominant trend over the last several quarters has been bullish.
From a fundamental perspective, the rise in oil prices comes down to simply supply and demand. With China starting to loosen its COVID lockdowns in major cities like Shanghai and Beijing, demand is coming back online in the world’s second-largest economy. Meanwhile, the US “driving season” is ramping up, with data showing that US consumers are not yet cutting back meaningfully on gasoline purchases despite high prices.
On the supply side, sanctions against Russia (which provided 14% of global oil supply last year) have pushed most of Western Europe to source oil from more far-flung locations, driving up freight costs. Though OPEC and its allies agreed last week to pump an extra 648K barrels per day, 200K more than anticipated, analysts are skeptical that the cartel will be able to meaningfully increase capacity after years of underinvestment in production; yesterday, Saudi Arabia announced that it was raising the price of its oil by $2.10 per barrel for Asian buyers, underscoring the tight nature of the market. Put simply, the oil market already featured higher demand than supply before the war between Russia and Ukraine cut supplies on the global market further.
As we noted above, oil has been trending higher for months, culminating (so far) in the early-March spike to nearly $130. Now, after consolidating around the $100 level through April and early May, bulls are once again eyeing higher prices.
As the chart below shows, WTI crude oil has been bouncing off a bullish trend line since December, and Friday marked the second-highest daily close for the commodity in the last 14 years. As long as rising trend line support (currently around 108.50) holds, the bulls will remain in control of the market for a potential retest of the March highs near $130 in the coming weeks.
Source: StoneX, TradingView
Russia tells Saudis what they want to hear while selling oil at rock-bottom prices Moscow’s situation underscores the difficulty of fighting G7’s $60 per barrel price...
Forget rising gasoline prices or the fact that there was no more oil released from the Strategic Petroleum Reserve (SPR). The oil and product markets are infected with Fed anxiety....
Gold is declining for the fourth consecutive session, flirting with the $1900 level and $49 below last Thursday's peak. Gold's 2.5% retreat is much more pronounced than the dollar...
Are you sure you want to block %USER_NAME%?
By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.
%USER_NAME% was successfully added to your Block List
Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.
I feel that this comment is:
Thank You!
Your report has been sent to our moderators for review
Add a Comment
We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
Enrich the conversation, don’t trash it.
Stay focused and on track. Only post material that’s relevant to the topic being discussed.
Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.