Crude Oil Price Outlook Ahead of EIA’s STEO and OPEC’s Monthly Report

Summary:

Crude oil price is higher as bulls strives to push past last-week high to $70. Investors are now keen on OPEC's monthly report and EIA's STEO.

Crude oil price is trading higher as the market reacts to Friday’s cyberattack on the Colonial Pipeline system. Colonial Pipeline operates the largest pipeline system in the US; delivering about 45% of the fuel used in East Coast. Brent futures are trading along $69, up from last week’s low of $67.41. WTI futures are also up by 0.63% at $65.31. A prolonged shutdown is likely to have a significant impact on gasoline prices.

Investors are also focused on Tuesday’s EIA’s short-term energy outlook (STEO) and the OPEC monthly report. In April’s STEO, EIA forecasted that Brent prices will trade at an average of $65 in Q2’21 and $61 in the year’s second half. OPEC’s report comes at a time when the coalition is set to increase oil production by over 2 million bpd between May and July.

Brent Futures Technical Outlook

Crude oil price is trading higher as the bulls in the market seek to retest the one-and-a-half month high of $69.94 hit last week. At the time of writing, brent futures were up by 0.85% at $68.78. On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages. Furthermore, the formation of an ascending channel signals additional gains.

Crude oil price is likely to find support along the 25-day EMA at around $68.41. After trading at its current resistance level at $69, I expect it to surge past last week’s high to hit $70. That will be its highest level since mid-March. However, this thesis will be invalidated by a move below $67.74.