Crude oil futures are settling at $83.38. That is up $1.84 or 2.26% on the day.
The gain is the largest one day gain since June 10 when the index rose 2.93% and driven by expectations of higher summer demand and concerns over potential supply shortages due to OPEC+ production cuts.
Oil prices increased by 6% in June, supported by OPEC+ extending output cuts until 2025. Analysts foresee supply deficits in the third quarter as summer travel and increased air-conditioning usage reduce fuel reserves.
Investors are awaiting comments from Federal Reserve Chair Jerome Powell, the central bank's policy meeting minutes on Wednesday, and U.S. nonfarm payroll data on Friday to gauge the direction for ageless rates and the economy. Additionally, traders are monitoring the impact of hurricanes on oil and gas production, with Hurricane Beryl threatening the Caribbean's Windward Islands.
Technically, after moving above the 50% retracement of the move down from the April 2024 high at $80.06 back on June 18, the price consolidated between the 61.8% at $81.84 and the 50% midpoint at $80.06 until breaking higher on Friday. That break, however, did retrace back toward the 61.8% retracement level into Friday's close (see yellow area on the chart above).
Today, the trend was more to the upside extending to the highest levels since April 29.
The next target comes in against the April 26 high price at $84.46. The close risk now comes against the 61.8% retracement at $81.84.
