Oil prices steadied after posting their biggest gains in a week, as the OPEC+ alliance prepared to confirm its production cut policy amid ongoing tensions in the Middle East and Russia.
Global benchmark Brent crude was trading near $87 a barrel after rising 1.6% yesterday, while West Texas Intermediate crude was above $82. OPEC+ delegates see no need to change oil supply policy at next week’s meeting, with quotas in place until June proving effective.
Impact of Ukrainian attacks
Crude oil is on track to rise about 13% this quarter after breaking out of a tight range that dominated the first weeks of the year, when the spread between bids and offers was narrow. Attacks on Russian refineries by Ukraine helped fuel the rally, along with signs of strength in some product markets including gasoline. The overall bullish outlook has prompted hedge funds to increase their bets on Brent crude.
Signs of a shift in monetary policy also helped support sentiment. The US Federal Reserve signalled its readiness to cut interest rates later this year, boosting appetite for riskier assets.
Reaching the golden intersection
Technical indicators also look positive, with Brent crude’s moving averages approaching a so-called golden cross, a bullish pattern that indicates the 50-day moving average of oil prices has crossed above the 200-day moving average. The last time a golden cross occurred was in August, when Brent crude rose more than $10 a barrel to above $95.
