Oil Prices Surge Amid Concerns Over Tight Supply

Oil prices rebounded during Wednesday’s trading session following previous declines, with indicators pointing towards tight supply amidst production cuts by major oil producers. Brent crude reached $82.35 per barrel, up from the opening price of $81.99, while West Texas Intermediate crude rose to $78.54 per barrel compared to $78.13 per barrel.

Investor concerns were raised after China announced its intention to maintain economic growth around 5% for 2024 without concrete stimulus plans, sparking fears of a slowdown in demand growth. However, OPEC+’s extension of voluntary production cuts by 2.2 million barrels per day until the end of the second quarter contributed to tight supply. Additionally, disruptions in oil tanker movements due to Houthi attacks in the Red Sea further supported price increases.

Technically, analysis of the 4-hour chart shows the price remains below the 78.50 resistance level, with simple moving averages exerting downward pressure. A cautious negative outlook is maintained, contingent upon a break below 77.50, which could lead to targets of 76.50 and 75.60. However, stability in trading above 78.50 could reverse downward momentum, potentially leading to targets of 79.30 and 80.30 initially.