Brent: The Broader Bullish Trend Remains Intact

May 02, 2019 8:51 AM ET
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Contributor Since 2017

Helen Rush has been working in the financial markets since 2005, specializing in the International Foreign Exchange Market. She started as an individual trader learning about Forex when she was a student. First, Helen was interested solely in FX spot trading, but later on got the experience in options, interest rate derivatives, bonds, equities, and futures. Such a broad experience in developing trading strategies using cross markets analysis helps her in predicting economic surprises, thus serving as a good base for successful money management. In 2016, she joined the Capital Markets team as a senior analyst focusing on providing research and commentary on the foreign exchange market.

Summary

  • Crude oil prices managed to strike a third day of gains yesterday.
  • According to the EIA data, US crude stockpiles last week jumped by nearly 10 million barrels to 470.6 million barrels, to their highest since September 2017.
  • Brent slipped below the $72 handle but still holds above the $71 support.

  Crude oil prices managed to strike a third day of gains yesterday but failed to keep the upside momentum and turned lower today as traders are digesting the latest report from the US.

  According to the EIA data, US crude stockpiles last week jumped by nearly 10 million barrels to 470.6 million barrels, to their highest since September 2017. Meanwhile, production hit a record high of 12.3 million barrels per day. The numbers are fueling fears that stockpiles will continue to rise in the coming weeks as the US refineries are preparing for the traditional maintenance period.

  On the other hand, further decline in exports from Iran and Venezuela as well as the rising prospects of extending production cuts by OPEC+ in June will likely cap the selling pressure in the market. Brent slipped below the $72 handle but still holds above the $71 support. A break below this level could worsen the short-term technical outlook in the market while the broader bullish trend remains intact.

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