fundamental News - OIL
Oil prices edged up to their highest in over two years in volatile trade
on Thursday's session, on optimism for strong economic demand after new
U.S. unemployment claims fell to their lowest since the country's first
wave of COVID-19 last year. But WTI oil
price 'Doji' candlestick closed for the 2nd day.
The market shook off a brief plunge after media reports suggested the United States lifted sanctions on Iranian oil officials.
The U.S. Treasury later said it had removed sanctions on three
former Iranian officials and on two companies previously involved in
trading Iranian petrochemical products. A U.S. official told Reuters
that the activity was "routine" and not related to
talks with Iran over reviving the 2015 deal to restrict its nuclear
weapons development.
The number of Americans filing new claims for unemployment benefits
fell last week to the lowest level in nearly 15 months, while consumer
prices increased solidly in May as the pandemic's grip on the economy
continues to ease. The recent unemployment
and labor data published in the (United States) are a definite positive
sign that the recovery in the country is speeding up.
More business activity means more energy consumption, and a better
economy is a needed prerequisite for road and air traffic to increase.
The Organization of the Petroleum Exporting Countries said oil
demand would rise by 6.6%, or 5.95 million barrels per day (bpd), this
year. The monthly forecast was unchanged for a second consecutive month.
Kilduff noted, however, that the market was "priced to perfection
in relative tightness," and said Thursday's brief midday price drop
shows what can happen if Iran or OPEC+ add more barrels to global
supplies.
OPEC+ is an alliance between OPEC and other producers including Russia.
Analysts have said Iran could provide about 1 million to 2 million
barrels per day (bpd) in additional oil supply if a deal is struck and
sanctions lifted.
Technical analysis
Oil is reacting to the 'Doji' closed from the previous session down
by $0.20 in early Asia trading. If the correction continue it will pull
back to the daily 20-SMA and trendline support area around $67.20.
expectation today: bearish
