Exploring Factors Driving Crude Oil Price Surge

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It appears that the upward trajectory of crude oil prices is set to continue in the near future, with several positive factors contributing to this trend. Among the most significant are:

  • Extending the voluntary cuts in oil production by the OPEC+ alliance by two million barrels per day until the end of June this year

  • US crude oil inventories declined for three weeks in a row

  • Continuing geopolitical tensions in the Middle East, the Red Sea, and the Russian-Ukrainian war

  • Improved economic data in China – the largest oil importing country in the world – in addition to a speech by Chinese Premier Li Qiang, where he confirmed that China is intensifying support measures to stimulate growth and address systemic risks.

  • Indian oil refineries stopped accepting Russian oil

  • Forecasts of all major energy organizations for global oil demand growth this year

Goldman Sachs expects some commodities to rise by 15%, including oil, this year with central banks cutting interest rates, a recovery in manufacturing, and continued geopolitical tensions.

Technically, the price of crude oil has risen by approximately 14% since the low of February 5, which was recorded at $76.66, reaching a peak of $87.66 on March 19. It is currently trading near the $86 levels. There are several technical indicators suggesting potential support for crude oil prices in the next phase:

Firstly, the 50-day moving average (in blue), currently standing at $82.27, has approached the 200-day moving average (in yellow), which is at $82.86. The gap between them has begun to narrow, and any upward intersection or Golden Cross between them could indicate an upward trend in crude oil prices.

Secondly, the Relative Strength Index (RSI) is currently at 62 points, indicating upward momentum in crude oil prices.

Thirdly, the MACD indicator (in blue) has surpassed the signal line (in orange) in the positive zone, providing positive momentum to crude oil prices.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

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