Oil markets in range-trade mode to end the week
Oil prices finished modestly higher yesterday after the US data caused both contracts to spike lower initially. With markets seemingly comfortable with the Fed’s transitory narrative, oil quickly recovered. finishing 0.47% higher at USD72.40 a barrel, and closing 0.50% higher at USD70.10 a barrel.
News that Saudi Arabia has unwound all its voluntary production cuts are circulating in Asia today, and that appears to have temporarily pushed oil prices lower.
As a result, Brent crude has fallen 0.25% to USD72.15, and WTI has eased 0.15% to USD69.93 a barrel. The reaction is modest, though, and if anything, the price action is bullish. It suggests that the physical market has absorbed extra Saudi production with ease and that demand globally is robust and climbing.
Barring any G-7 surprises and an unlikely rally, oil should resume its climb next week. Only a retreat by Brent crude through USD70.00, or USD68.00 a...read more...