Despite bullish sentiment earlier this month – with prices rising from a low of $67.50 per barrel to a temporary high of $74.30 – oil was trading steadily in Wednesday’s trading sessions, based on PP Link Securities’ MetaTrader5 platform.
In Asian trading sessions on Wednesday (June 7), crude fell to around $71 per barrel after having risen on June 1 as prices recovered with progress made in preventing a US debt default.
Meanwhile, positive signs in Chinese manufacturing also brought optimism regarding the country’s recovering demand for oil.
Supporting bullishness in the oil markets was the private “China Caixin Manufacturing Purchasing Managers Index (PMI)” survey on June 1 that showed China’s manufacturing sector growing better than expected in May, according to Investing.com.
“Thursday’s data indicated that activity among smaller, private Chinese manufacturers was improving, which could herald a broader recovery as the country re-emerges from three years of strict anti-Covid lockdowns.
“Still, the survey also noted that economic growth in the country remained under pressure, which, coupled with a string of weak readings for April, tempered optimism over a Chinese recovery in oil demand,” Investing.com said.
It added that “uncertainties over more production cuts by the Organization of Petroleum Exporting Countries (OPEC) also kept crude markets on edge” before a June 3-4 meeting.
And on June 4, CNBC reported that Saudi Arabia had announced a continuation of previous measures taken by OPEC and allies – “OPEC+”.
“On April 3, several [OPEC+] producers revealed a combined 1.66 million barrels per day of production declines until the end of this year.
“[On June 4] they extended these measures to the end of 2024, with Riyadh announcing an additional one million-per-day voluntary and extensible drop starting in July.
“The OPEC+ group otherwise collectively decided to stick to its targets for 2023,” CNBC reported.
Technically, oil prices traded between $67.50 to $74.30 per barrel in May, with the pattern expected to be repeated in June. So for this week’s trading recommendation, investors could consider buying and selling oil in the same range as May.