Done
Brent rebounded by 0.7%, from yesterday’s very heavy -5%, which caused the price to sink to its lowest level since mid-March.
Coincidentally, exactly one year ago, on May 2, 2023, Brent ended the session with an identical collapse. Since then, there has never been a daily fall of this size.
The gain in crude oil since the beginning of the year has shrunk to around +10%.
According to experts, there are three main reasons that can explain the sudden decline:
1) the hope of a truce between Hamas and Israel, strengthened by the pressure of the United States and Egypt;
2) increased purchases by American refineries before Canadian oil arrives on the market at higher prices following the activation of the Trans Mountain pipeline. In fact, the EIA announced that weekly inventories grew by 7.3 million barrels during the week ending April 26, against estimates of a decline of 1.1 million;
3) the confirmation of rates by the Federal Reserve, which could reduce global economic growth this year and limit the increase in oil demand.
What explains today’s rebound, however, is the expectation that the cheaper price could push the US government to strengthen its strategic reserve, acting as a support for prices.
Effect
Technical Analysis. The sharp fall has profoundly altered the short-term bullish picture. The underlying trend remains set upwards as long as the p…
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