Oil prices remain very much in the control of the market bulls, which have been storming to the north for six consecutive weeks.
The most recent bull action that is seeing oil prices rising to near three-month highs, is thanks to expectations that major producers will agree to extend output cuts that have shored up prices, during a video conference likely to be held this week.
An alliance of oil-producing nations led by Saudi Arabia and Russia AKA OPEC+ are said to be close to a deal that would extend their collective production cuts through September 1.
The Organization of the Petroleum Exporting Countries has agreed to move a planned conference call to discuss future output curbs to Thursday, June 4, from June 9, the delegates said.
Outside of this, the broader recovery following the WTI May contract crisis that sparked panic selling and negative oil prices, has been strong since. Demand has been further picking up with the world’s second-largest importer of oil, China, allied with the easing of lockdown, seeing a return to fuel consumption and oil demand.
What does this mean for the markets?
Oil is likely to remain well supported to the upside, as long as the U.S. and China situation does not aggressively start flaring up, seeing their Phase one deal at danger, as this would be a tone changer. For now, further moves higher are eyed, with the bulls making a press towards the psychological $40 can be seen.
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