The oil price experienced a corrective wave yesterday, but it managed to maintain the medium-term uptrend. There is no bad news for the prices to go lower at the moment. Strong economic data from China, the world's largest commodity importer, has supported oil demand.
According to the official data, China's economic growth exceeded expectations in the first quarter of 2023. The country's GDP increased by 4.5% during this period. As estimated by the International Energy Agency (IEA), China will be responsible for the majority of global crude oil demand growth in 2023.
US oil production is slowing down.
As reported by Baker Hughes, the number of active rigs in the US dropped by 3 units last week (2 oil rigs and 1 gas rig).
Now there are 588 active oil rigs and 157 gas rigs left in the US. 3 new units have been installed in the Permian Basin, while their number in the Eagle Ford has dropped by 2.
Nirmala Sitharaman, India's Minister of Finance, said the country will consider buying oil from Russia at a cost close to or even above the price ceiling set by the G7 countries.
As pointed out by the minister, it is crucial for densely populated India to curb the rise in inflation, and ensure its own economic growth. Oil is an important resource for the country's economy, and 80% of this raw material is imported from abroad.
High demand for oil from major economies supports the prices.
According to technical analysis, oil has maintained its uptrend. The current price rebound may continue in the coming trading sessions. Yesterday's highs will be the upside target. It is also the previous local peak for oil. In terms of price, the target is around $86.25. A stop-loss could be placed upon a decline below the uptrend support, and below the rectangle formed at the beginning of the month. This is the price of $83.75.
Brent crude oil growth:
Take profit – 86.25
Stop-loss – 83.75
This content is for informational purposes only and is not intended to be investing advice.