Oil is up 1.6% on the day as WTI nears $65
The oil market is sending a clear signal that the OPEC+ decision yesterday is enough to keep the party going, as the bullish momentum remains undeterred despite a stronger dollar in the post-Powell narrative.
The bloc left production curbs in place, though easing some restrictions for Russia and Kazakhstan, with Saudi Arabia reaffirming their commitment by sticking with another round of voluntary cuts in April.
This sees oil buyers now trying to take a run above key trendline resistance levels and the 100-month moving average (red line) @ $62.07-62.
The daily chart does highlight some added resistance around $65.56 but given the bullish momentum, it is hard to go against oil fundamentals right now.
Goldman Sachs and UBS have both just upped their Brent forecast to $75 for 2H 2021 (price currently trading near $68) and that highlights how much room the rally could still run on stock drawdowns and tighter supply conditions that may come about.
There might be room for a correction amid the summer lull or if the technicals become too stretched and a squeeze/profit-taking may ensue, but the long-term backdrop is one that is extremely tough to argue against as the world economy gradually reopens.
