Brent crude oil price resumes the upward move after two days of correction as investors sentiment improves after the easing of the lockdown measures in many countries around the globe. As the commute to work starts to peak up, so does the physical demand for Brent crude oil.
Crude oil price also helped by clear signs that oil producers countries are sticking to commitments to cut the oil supply. Russia reported the crude oil output had dropped to the target of 8.5 million barrels per day for May and June fully complied with the cut deal with OPEC. Meanwhile, the U.S. rig count dropped by 31 rigs to a record low of 318.
The downside risk comes from fears that the recovery in physical demand might halt the supply cuts by many countries, and we might experience a pullback in the Brent crude oil price. Also, rising tensions between the USA and China could put pressure on crude oil prices.
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The Brent crude oil price is 1.65% higher at $36.06 as the rally from April low continues to drive the price to 10-week highs. The technical picture for Brent crude oil has improved, and higher levels might be on the cards in the short term. The longer-term technical outlook remains bearish as the crude oil price trades below the critical 100-day moving average.
On the upside, Brent crude oil price intraday resistance stands at $36.41 the daily top. If the Brent crude oil price breaks above $36.41, the next resistance will be met at $39.79 the high from March 11 trading session. Next hurdle stands at $41.63 the 100-day moving average.
On the contrary, the first support for the crude oil price is at $35.47 the daily low. Next support zone for Brent crude oil price will be met at $33.56 the low from May 22 trading session. Moving lower, the next support stands at $30.83 the low from May 15.