Oil prices inched towards the $70 mark but pulled back as US data provided some basis for correction. An analyst with Commerzbank, Eugen Weinberg, is optimistic that traders are no longer as concerned about pandemic-related demand issues but hinge their hopes on expanding demand.
As summer travel starts to kick in with more countries reopening their borders, demand for crude oil could approach 100 million barrels per day in Q3 2021. The independence day holiday weekend on July3/4 could also bring higher domestic consumption of refined products in the US, also adding to demand.
The intraday top fell just short of the 70.00 mark before the pullback, keeping the price below the critical resistance.
A break above this level sets up a price move towards 71.44, matching 2021 highs. 73.34 and 75.52 are additional price targets to the upside.
On the other hand, bears need a breakdown of the consolidation channel area for 67.74 and 66.81 to come into the picture as initial downside targets. If the pattern is viewed as a bearish flag, then the price could also pursue an end-point price level of 64.26, which requires that 65.95 be taken out.
