CRUDE OIL (CLc1) ANALYSIS
- U.S. crude (WTI)[1] pierces prior resistance levels
- Chinese Caixin PMI (MAY) edges higher than forecasts
- OPEC+ meeting addresses Iran’s return
- COVID-19 testing economic recoveries
CRUDE OIL FUNDAMENTAL BACKDROP
U.S. crude[2] has reached multi-year highs this morning after expectant favorable economic conditions. Key economic data scheduled this week (see calendar below) from both the European Union as well as the United States, should give market participants a good gauge of the state of the two major economic regions and therefore guidance on oil[3] prices – better than expected data could lead to further support for oil[4] prices. Focus will be on Non-Farm Payroll (NFP)[5] data as well as U.S. PMI’s[6]. Expect some dollar[7] volatility pre and post-announcements which could have a knock-on effect on dollar based commodities should actual data deviate significantly from forecasts.
CRUDE OIL ECONOMIC CALENDAR
Source: DailyFX economic calendar[8]
We have already seen Chinese PMI (Caixin) figures reaching yearly highs at 52.0 for May, primarily buoyed by new export orders. Manufacturers remain confident regarding future output which could provide additional incentive for oil bulls.
IRAN COMPLICATES MATTERS
The Organization of the Petroleum Exporting Countries (OPEC) as well as their associated producers known as OPEC+ confirmed that the return of Iran to the global oil landscape will be handled in an “orderly and transparent fashion”. Concerns surrounding excessive supply flooding the market has somewhat eased after this announcement but time will tell as to the accuracy of the statement released by OPEC. This comes at perhaps an inopportune time as world oil inventories have recently recovered from a sever supply glut due to the COVID-19 pandemic.
OPEC+ are
