Oil prices have continued their broad recovery this week, as the price pushes to a six-week high.
Overnight, data from China showed that there is a rebound in demand, following the easing of national lockdown in the country. China’s daily crude oil throughput bounced in April from a 15-month low in March, as refiners turned it up a notch with their operations to meet renewed fuel demand.
According to China’s National Bureau of Statistics (NBS), data from them indicates that the country processed a total of 53.85 million tonnes of crude oil last month, which equates to about 13.1 million barrels per day (bpd) and 11% higher than 11.78 million bpd in March.
It follows on from the bullish tone set earlier in the week, as noted in our prior article, more cuts were announced by Saudi Arabia. Furthermore, Iraq is committed to the OPEC+ oil production cuts agreement, which the acting oil minister said on Thursday, dismissing media reports that had questioned the ability of OPEC's second-largest member to trim output by 1.061 million b/d in May and June.
What does this mean for the market?
Prices, as noted, have been able to push back up to their highest in six weeks, with further moves higher still in view. As mentioned, in the previous article analysis, the big weekly resistance was seen at $29, of which the bulls are testing at the time of writing. It comes thanks to the technical bullish pennant breakout, inviting a wave of momentum.
Given countries are easing lockdown measures, fuel demand should continue to increase and support the prices. OPEC+ plus will also need to ensure all participants paly their part in their scaling back of production.
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