The US Crude Oil Futures (NYMEX: CL) finished the fourth straight week on the green as OPEC+ supply cut plans continue to pull investors towards the commodity. The IEA has warned that the planned output cut could intensify the expected supply deficit in the second half of the year. The supply deficit could push the oil price higher, which would hurt consumers and hamper the global economic recovery.
Investors are also laser-focus on the economic indicators from China to understand better the extent of the economic recovery of the world’s second-largest oil importer, which could impact the oil futures direction in the short-run. However, with the 84.9% of the cash market pricing in a potential 25-basis point hike in Mya, fears of a rate hike tilting the global economy towards a recession could limit the upside.
Technical
The oil futures are consolidating at the golden ratio of the Fibonacci retracement range from the 7th of November 2022 highs of $93.74/BLL to the 20th of March 2023 lows of $64.36/BLL. The bulls could be hoping that the Chinese growth data could push the price even higher above the immediate resistance at $82.95/BLL, a level of interest for the bulls. A sustained push above the $82.95/BLL would bring the $84.73/BLL as bulls look to continue to push the price higher.
However, should the bears gain dominance and push the oil futures lower, then a break below the $81.52/BLL support level could offer a short-term trading opportunity for the bears. A sustained fall below the $81.52/BLL would bring the 50-day moving average and the support level at $79.69/BLL into play.
Summary
With the market firmly focusing on the Chinese macroeconomic indicators due this week, the bulls could be confident in breaking above the $82.95/BLL price level. The bulls will need increased buying momentum if they look to test the $84.73/BLL resistance level.
Sources: TradingView, Reuters, CNBC.
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