Brent rose 0.4% to $67.05 yesterday. This is the first time in more than a month that the benchmark crude has closed above the $67 level. In the view of strategists at OCBC Bank, crude oil looks set to resume its upward climb.
Crude oil posts a break to the upside
“In the past two weeks the 5-day average of Asia gasoline and crack spreads have been inching higher. In the case of gasoline, whether one looks at the gasoline FOB Houston-WTI crack margin or the Asia 92 RON Singapore gasoline-Brent spread, those have been closing in on the highs seen in 2019 and are pointing to a supply tightness in the market, by virtue of which suggests commuters are now increasingly up and moving.”
“Specs are the least long on NYMEX on a YTD basis as of last Tuesday and that presents an opportunity for longs to start building their positions again.”
“We stay bullish on crude oil in both the short and medium-term, with near-term resistance eyed at $69.”