By Samir Al Khoury,
Crude oil prices continue their upward trend for the fourth day in a row, today recording levels exceeding $84. However, these levels still represent a decline of about 8% year to date.
Geopolitical tensions in the Middle East and the Red Sea, in addition to the extension of the voluntary reduction in oil production expected to occur by the OPEC+ alliance at its meeting on Sunday, June 2, continue to support oil prices.
However, there are many factors that may limit this increase, the most prominent of which are:
• Abundance of supply from outside OPEC+: This includes countries such as the United States of America, Canada, and Guyana.
• Strength of the US dollar: This negatively affects oil prices. The recent hawkish statements of some Federal Reserve members regarding the course of US interest rates, in addition to the superiority of some US economic data to analysts’ expectations, indicate the continued strength and flexibility of the US economy. The consumer confidence index recorded 102 points yesterday, a percentage that exceeded expectations (96.0) and the previous reading.
As for the technical picture for crude oil prices, it looks rather good, especially with oil prices today exceeding the important resistance barrier, which is the 200-day moving average in yellow, standing at $84.11. However, the next challenge lies in staying above this barrier and reaching the 50-day moving average level in blue, which stands at $86.01. As for the Relative Strength Index (RSI), it exceeds the 50-point level, currently recording approximately 51 points, which means somewhat positive momentum for 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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