Oil gains continue due to supply risks from the Kurds and banking relief
Crude prices edged higher on Tuesday, extending sharp gains from the previous session on supply disruption risks from Iraqi Kurdistan and hopes that turmoil in banking is being contained.
Brent crude futures gained 15 cents, 0.2%, to $78.27 a barrel by 1308 GMT. West Texas Intermediate U.S. crude was up 14 cents, or 0.2%, at $72.95.
Prices rallied more than $3 on Monday after Iraq was forced to halt exports of about 450,000 barrels per day (bpd) from its northern Kurdistan region through Turkey after an arbitration decision confirmed Baghdad’s consent was needed to ship the oil.
Monday’s announcement that First Citizens BancShares Inc will acquire deposits and loans of failed Silicon Valley Bank spurred optimism about the banking sector and sent European bank shares higher.
“At the moment, concerns about the risk to financial stability has been relegated to the back of investors’ mind but another bank run could trigger a flight out of risk again,” said PVM Oil analyst Tamas Varga.
Oil prices were also expected to draw continued support from signs of recovering demand in China.
China’s crude oil imports are expected to rise by 6.2% in 2023 to 540 million tonnes, an annual forecast by a research unit of China National Petroleum Corp showed on Monday.
Russian Deputy Prime Minister Alexander Novak on Tuesday said that Russia needed to focus on boosting energy exports to so-called “friendly” countries and noted that Russian oil supply to India registered a 22-fold jump last year.
U.S. crude oil stockpiles were seen rising by about 200,000 barrels last week, a preliminary Reuters poll showed on Monday.
Easing concerns of a banking crisis, following a government-brokered takeover of Silicon Valley Bank by peer First Citizens BancShares helped improve sentiment, as did a slew of assurances from regulators that the banking sector was stable.
A lack of bad news on U.S. banks over the past week helped bring concerns over a banking crisis to rest.
While a recovery in China is expected to push up crude consumption, initial economic readings from the country have painted a weak picture of crude demand. The country’s oil imports sank in the first two months of the year.
BRENT CRUDE OIL TECHNICAL ANALYSIS DAILY CHART:
Brent Crude Oil has currently started trading in up channel.
Brent Crude Oil is currently trading below 20&50 SMA.
RSI is in buying zone which suggests bullishness and Stochastic is suggesting up trend.
Brent Crude Oil resistance is at 77.70 & its immediate support level is 77.02
HOW TO TRADE BRENT CRUDE OIL
Brent Crude Oil has currently started trading in up channel, it has broken previous day high and currently it is at resistance zone, if the zone is broken then can further upside to the second resistance.