By Samir Al Khoury,
It seems that the upward trend of crude oil prices is prevailing in the next stage, with oil prices benefiting from several positive factors, the most prominent of which are:
• Continuing geopolitical tensions in the Middle East, the Red Sea, and the Russian-Ukrainian war
• Improved economic data from China, the world’s largest oil importing country. The manufacturing Purchasing Managers’ Index, according to Caixin, a non-governmental body, reached 51.8 points yesterday, exceeding expectations (51.5) and the previous reading (51.7), marking its highest level in 3 years.
• Expectations of increased oil demand in the summer, particularly from the United States of America, the largest oil-consuming country in the world.
• Natural concerns, including the hurricane season in the Atlantic Ocean.
• Dot plot expectations, suggesting a 25 basis point reduction in US interest rates this year. Markets currently anticipate the possibility of two cuts by the Federal Reserve.
According to Bloomberg Economics, it is expected that most central banks will reduce interest rates by a cumulative 155 basis points from globally agreed rates by the end of 2025.
Technically, the price of crude oil has risen by about 13% since its low on June 4, 2024, at $76.79, reaching a peak of $86.88 today, and currently trading near $87. The primary challenge lies in surpassing the $92.14 level, the highest recorded this year on April 12, 2024.
Technical indicators suggest support for crude oil prices in the near term for several reasons:
First: A bullish or golden cross occurred today between the 20-day moving average (in gray), standing at $83.60, and the 50-day moving average (in blue), standing at $83.45, indicating an upward trend in crude oil prices.
Second: The Relative Strength Index (RSI) currently stands at 63 points, indicating upward momentum in crude oil prices.
Third: The MACD indicator (in blue) is above the SIGNAL LINE (in orange) in the positive zone, signaling positive momentum to crude oil prices.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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