Oil prices are accelerating their rebound on Thursday, with Brent and WTI prices hitting their highest levels in seven weeks, amid supply disruptions and falling U.S. crude oil inventories.
On the supply side, oil prices were supported by disruptions to oil flows in Canada and the northern U.S. due to extreme freezing and doubts about supplies from Kazakhstan as the country faces protests.
Doubts about OPEC+'s ability to increase production are also supporting oil prices. Some members, including Nigeria and Libya, are struggling to increase production. Libya's production has fallen by about 40% due to militia unrest, while Russia failed to increase production last month.
On the demand side, oil prices are being supported by renewed optimism about the global economy as health risks are being reassessed by investors.
On the technical side, the bullish outlook for oil prices has also been reinforced. The price of a barrel of WTI has finally managed to fully break through the resistance zone at around $76.80, below which it had been stalling for two weeks.
Breaching this resistance zone opens the way for a new bullish rally to the symbolic threshold at $80, and then eventually to the October high at $85.
The bullish outlook would be technically invalidated if a pullback below the recent consolidation zone at $75 occurs.
(Chart Source: Tradingview 06.01.2022)
Weather, the situation in Kazakhstan, OPEC+ production, and the health situation will be the main catalysts for oil prices in the short term.
Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.
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