The black viscous hydrocarbon gained more than a dollar at the first trading session of the month of March. Oil traders are going bullish thanks to growing positivity that the global economy is on track for a full recovery.
Not forgetting the additional prospects of a whopping $1.9 trillion stimulus deal set to trickle into the global financial market coupled with the approval of another COVID-19 vaccine drug momentarily kept crude oil bears on the sidelines thereby fuel demand recovery hopes.
Still, it’s key to note that the oil market has been hobbled partly by the immense quantitative easing programs in play across broader markets spectrum and major oil production curbs by leading oil-producing nations.
So it becomes unsurprising for oil traders to focus much more on crude oil supply dynamics ahead of next week’s OPEC+ meeting as reports surface, Russia is bent on increasing its production capacity in order to fulfill its fiscal obligation, coupled with rumors that hint the Saudi’s seem to favor changing the status quo slightly.
Though, reports point to the fact that Saudi Arabia may choose to delay the return of some or all of its previous curbs in order to keep crude oil prices high, even if the rest of OPEC+ are in support of supply hike, hinting that such a meeting could end in a deadlock.
Looking deep into recent price action at oil markets suggest Brent crude touched the minor bullish channel’s support base and jumped from there, wit though it’s fair to say the bullish flag pattern that its resistance line located around the $65 a barrel price levels meaning oil bulls will need more strong macro triggers to break such resistant in the mid-term, knowing fully well the U.S dollar is bouncing up at record levels.
Still, oil traders are aware that at one point; more oil supplies are needed to come into the global market in order to ensure OPEC+ meets incremental demand although it will be necessary for them in keeping the internal discipline ducks in a row.