Crude prices for oil (WTI as well as Brent) maintained their upward trend through the conclusion of last week. Spotlights are Economic Data

Crude Oil Fundamental Framework

Crude prices for oil (WTI & Brent) kept up their upward trend, ending the week at values that were last observed in the middle of April. The shift was prompted by a number of variables. Among the most important of which being the lower US currency and Friday’s misses on the main PCE price index & Michigan consumer sentiment numbers.

The Core PCE, widely regarded as the Fed’s favorite gauge of inflation.  Grasped 4.1%, indicating more evidence of moderating price increases and reflecting the latest CPI data. These figures mitigated the effect of high US GDP & durable goods orders only a few days before. Which had impacted on the dollar.

Begin with major figures from China through the NBS PMI report, which is likely to surge greater.  Perhaps providing an extra boost to crude oil prices. Late in the next week, the Caixin data will be due.

Crude Oil and US dollar

The US PMI and (NFP) numbers are planned in US dollars. The normal oil prices and weekly inventory change data (API & EIA) will be keenly monitored. Whereas the Baker Hughes rig number which is progressively dropping, may exacerbate shortages. OPEC+’s latest output cut extender statement for August has re-appeared. Raising the question as to if the group’s policies could go on beyond September in addition. Market analysts predict another sustained decrease.

Technical Perspective and Outlook

In line with early CME Group estimates, open interest for crude oil futures exchanges fell over the 2nd consecutive day on Thursday. Falling down roughly 2.5K contracts. Volume, on the contrary hand, increased by roughly 130K contracts following 2 consecutive daily rebounds.

WTI: More increases must exceed the $80.00 barrier.

WTI pricing went over the critical $80.00 per barrel threshold on Thursday, but finished beneath it. The daily advances came with falling open interest, which cautions with the upswing continuing in the short term. For the moment having, the $80.00 zone stays a major barrier zone.

Net Long Vs Net Short Positions

Yet another encouraging sign is the increase in the mood of oil dealers. WTI investors’ net long holdings climbed during a second week in a row. As short-term holdings decreasing and the number of longs rose.  Whereas net long holdings in WTI stay modest historically. They’ve surged by more than 80 percent after OPEC unveiled its most recent round of output cutbacks. Brent investors’ net long holdings grew this past week, while overall long holdings increasing and the number of shorts decreased.

Crude(Brent) oil price movement has entered the overvalued area in the (RSI), with a target of 85.00 within sight. Throughout this process, the 200-day MA has been additionally violated. As worldwide expansion fears finding grip, this will be fascinating to watch the length of time this can last.

Technical Levels

 Resistance levels: – Brent

• 87.45
• 85.00

Support levels:

• 82.38
• 200-day MA
• 80.00