WTI crude oil shows a three-week increase and has recently fluctuated at a 10-week high. Although economic troubles have recently pressured WTI, the OPEC+ surprise keeps oil purchasers at the table. Positive US statistics weaken the US dollar and help oil prices hold stronger before the important NFP. Notwithstanding pessimistic predictions for the US jobs report for March, further oil price gains cannot be ruled out.
Energy markets celebrate the Good Friday holiday as WTI crude oil holds stable around $80.50, well-positioned for a three-week upswing. As a result, the black gold is defending the week-start gains granted by the Organization of Petroleum Exporting Countries (OPEC) and its allies headed by Russia, known as OPEC+, who announced a surprise supply reduction. The energy benchmark has recently been under pressure from economic worries and a cautious attitude regarding the US jobs data for March.
Markets were taken aback by the OPEC+ group’s unexpected voluntary production reduction of over 1.66 million barrels per day. The International Energy Agency (IEA) said after the OPEC+ announcements that the decision to reduce oil supply runs the danger of worsening a competitive market by driving up oil prices amid inflationary pressures.
On the other hand, the black gold’s recovery movements were also supported by the US Dollar‘s deterioration, which was backed by negative US statistics.
Despite this, the US Dollar Index (DXY) prints a four-day losing run while trimming weekly losses by around 102.00.
Speaking of US statistics, the first claims for unemployment insurance increased to 228K for the week ending March 31 from the previously reported 246K, which was more than projected at 200K. It’s important to note that the Challenger Job Cuts increased to 89.703K from 77.77K the month before. Before this, the US JOLTS Job Openings fell to a 19-month low in February, and the 145K statistics from the ADP Employment Change for March also let markets down. Moreover, the March US ISM Services PMI, which fell to 51.2 from 55.1 in February and 54.5 in anticipation, increased pessimism.
China’s hope for economic development and positive activity reports from the dragon kingdom may also be helping the oil price. Beijing “will fight off foreign financial market shocks and hazards,” according to Pan Gongsheng, president of China’s State Administration of Foreign Exchange (SAFE).
However, it should be noted that the recent calls for a recession present a challenge for WTI crude oil buyers. As a result, more indications of a slowdown in the economy should be watched for clear indications, especially when the prices of commodities are trading close to a short-term key resistance line.
The US employment data for March will be vital to monitoring for clear guidelines and the news about the recession. Experts predict that the headline Nonfarm Payrolls (NFP) number will be lower than expected, coming in at 240K from 311K before and that the 3.6% unemployment rate will remain unchanged. The varied predictions for the Average Hourly Wage, on the other hand, make the result even more intriguing.
Technology Evaluation:
WTI crude oil purchasers should exercise caution until prices consistently close over a four-month-old declining resistance line at $81.70 at press time.