Oil has been pushing to the north over the last nine weeks, after that brief period of madness where negative prices were observed. The bulls have managed to help the black gold move back to the highest levels seen since early March.
The support comes as major economies have got back to business gradually, thanks to the easing in lockdown measures that had been implemented to contain covid19. Demand for oil has fundamentally come back into play, with consumption picking up globally.
It is also thanks to the scaling back of production by OPEC and its allies and recently agreed to further extending these cuts. Given the reduction in oil that is being pumped out by producers and now the pick up in economic activity, these factors have well-supported prices.
Risk to the rise?
The market still remains concerned about a rising number of coronavirus cases in the United States and in other parts of the world such as South America. If a second wave does fully occur and economies are forced to go back into lockdown, then this could harm the bull run for oil.
Elsewhere, China, the world’s top crude importer, is also expected to slow crude imports in the third quarter, after record purchases in recent months, as higher oil prices somewhat hamper demand and refiners are cautious about a second virus outbreak.
As noted in the video, the bulls have broken out of a pennant structure, with further moves north still eyed. The next major area of supply can be seen at the range of $42.50-47.00.
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