Oil Prices Rangebound Amid Trade Tensions and Demand Forecasts
The world of oil prices continues to be in a consolidation phase, remaining largely rangebound. This is due to various factors such as the suggestions of new tariff exemptions by U.S. President Donald Trump and the increase in China’s oil imports. However, this balance was disrupted by the International Energy Agency (IEA) lowering its oil demand forecast.
The uncertainty in global oil markets is a result of shifting U.S. trade policies. OPEC recently revised its demand forecast for the first time in months, and the IEA followed suit by reducing its oil demand growth projections. The IEA cited growing trade tensions as the reason for this adjustment, signaling a potential impact on the oil market.
Key points from the IEA report include a rise in global oil supply in March, with Non-OPEC+ countries accounting for a significant portion of the increase. Despite these downgrades, oil prices found some support from data showing an increase in China’s oil imports in March. This boost in imports was attributed to a surge in Iranian oil as the U.S. tightens sanctions on the country.
The ongoing nuclear talks between the U.S. and Iran are also a factor to watch, as President Trump has warned of military action if a deal is not reached. The potential risks of a U.S.-Iran confrontation could lead to a significant jump in oil prices. However, recent Chinese data has cast doubts on the effectiveness of blocking Iranian oil exports as a pressure tactic.
Looking ahead, oil inventory data releases are expected to provide more insight into the market trends. Technical analysis of Brent Crude shows a tight range since a hammer candlestick pattern on April 9. Resistance levels at 66.44 remain strong, but the daily RSI suggests bearish momentum is still at play.
On the H4 chart, the RSI crossing above the neutral 50 level could indicate further upside momentum. Immediate resistance levels are at 66.42, 68.17, and 69.35, while support levels are at 63.00, 61.00, and the psychological level of 60.00.
In conclusion, the oil market is currently facing a mix of factors that are influencing prices and market sentiment. The interaction between trade tensions, demand forecasts, and geopolitical developments will continue to shape the future of oil prices. Investors and traders should stay informed and monitor these key factors to make well-informed decisions regarding their finances.