Oil prices have bounced at the previous support of $64.10 and now have a precise range of $82.50.
USOIL – Daily Chart
USOIL recently collapsed at the $82.50 level and has two groups for a breakout to the upside or downside.
Oil prices rose on Tuesday due to a tighter gasoline market outlook and a warning from OPEC that hinted at further production cuts by the group. USOIL rose to $73.32 as the bounce continued from recent lows.
Gasoline futures rose 1% on Tuesday, with analysts expecting a third straight weekly decline in coming inventories this week, ahead of the Memorial Day holiday on May 29, which starts the summer demand season.
The American Petroleum Institute reports data on Tuesday, followed by the US Energy Information Administration’s (IEA) official data on Wednesday. That could see further demand for oil prices in the coming week.
Production cuts by OPEC+ members will take effect this month, which could add to a squeeze on supplies.
Crude Oil Market Forecast
Saudi Arabia’s energy minister said that short sellers should “watch out”. The comments could mean OPEC+ will reduce production further when it meets on June 4.
The oil price will also depend on the US dollar, with White House and Republican negotiators meeting again on Tuesday to solve the stalemate over the $31.4 trillion US debt limit, with Washington facing a default in less than nine days.
The (IEA) also said it does not expect the Group of Seven nations’ recent moves on Russian price caps to change the supply picture for crude oil. The G7, the European Union, and Australia agreed on a $60-per-barrel price cap on Russian seaborne crude and set an upper price limit for Russian oil products to cut revenue for Russia.
“Any significant changes in the markets as always we will reflect in our analysis, in our reports, but for the time being I don’t see a reason to make a change in our analysis,” the group said.