Green shoots of optimism surrounding China’s economic reopening, being the world’s top crude importer, is helping Brent on to back-to-back weekly gains.
Oil bulls remain intent on laying claim to the psychologically-important $90/bbl handle, despite rising US inventories and recent pledges by central bankers to persist with demand-destroying rate hikes.
Traders likely took their cues from the nascent bullish sign of this week’s breaching of the 50-day simple moving average (SMA), with the widely-followed technical indicator now offering immediate support.
Brent prices have also made enough strides to now test immediate resistance at its 100-day SMA and also the upper bound of the downtrend that began in June.
An upside break of these key technical levels could well send a stronger bullish signal that spurs on further gains for Brent.
From a fundamental perspective, global demand fears must continue to be chipped away in order for oil to sustain an upside breach.
Oil bulls have to hold fast to the optimism that the global recession may not be as severe as feared, despite major central bankers persisting with their demand-destroying rate-hikes, as signaled most recently by ECB President Christine Lagarde and Fed Vice Chair Lael Brainard.