US Light Crude oil prices were lower in early trade this morning. This follows two consecutive weeks of gains for both Brent and WTI. Focusing on the latter, front-month WTI fell towards $55 per barrel in early April, marking its lowest level in over four years. It then retested this area earlier this month.
Since then, prices have picked up. But every rally attempt has been quickly rebuffed, with the 50-day moving average acting as the latest barrier to higher prices.
Earlier today, front-month WTI was trading on either side of $62 per barrel. This should be good news for us all, as cheaper energy helps to keep down our living costs, along with inflation and thereby interest rates.
Source: TradingView
It's also exactly what Donald Trump promised ahead of and after his election victory in November. The fundamental dynamics favour a moderate oil price. OPEC+ members continue to unwind prior production cuts at a faster-than-expected rate.
Meanwhile, the Trump administration is touting success in talks with Iran, including a curb on the latter’s nuclear ambitions. This could mean taking sanctions off Tehran, meaning yet more supply, although Iran has played down expectations.
Meanwhile, alternative energy sources abound, while global oil demand growth continues to fall. One day all this could change. But for now it all helps to keep oil prices in check.
