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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.”

 

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