Crude oil prices were on a rebound early Friday, as the world’s most traded commodity opened trading at $73.97 after losing 2.55% on Thursday. The markets had made marginal gains early on Thursday before closing the day in the red on concerns around rising tensions in the Middle East. News of OPEC+ cuts this quarter could not sustain the momentum gained yesterday, as the prospect of more direct confrontation between the United States and Iran becomes clearer.
OPEC announced on Thursday that it will stick to an earlier decision to cut daily production by 2.2 million barrels, at least until March, when the cartel’s members will decide on the next course. Oil also continues to face pressure from gloomy forecasts around China’s economy. The latest of these is Friday’s pronouncement by the International Monetary Fund (IMF) that the world’s second-largest economy will slow down to 4.6% this year, and further down to 3.6% between 2024 and 2028.
News of a potential ceasefire between Hamas and Israel also exerted downward pressure on the commodity. The two warring sides are reportedly considering another pause to the 3-month old war, which could boost supplies.
The US dollar is signaling mild strength heading into the weekend, and this could help prop up oil. However, the market is still digesting the Fed’s decision to hold interest rates and eyes will be on Friday’s Nonfarm Payrolls data to give a better perspective of potential price trajectory next week.
The RSI and 9MA signal neutral strength and the price could make marginal shifts upwards or downwards from the current position. Downward action will find the first support at $73.70, but a further loss in momentum could shift the support to $73.20. However, if the price breaks above $74.80, it could build momentum to find the first resistance at $75.45, beyond which it could encounter another resistance at $76.00.
This post was last modified on Feb 02, 2024, 11:51 GMT 11:51