May 05, 2023 (MLN): Oil prices started to recover in the early Asia trading session on Friday, after the eventful past few days amid U.S. FOMC and ECB rate hike decision.
Both oil benchmarks rose, with Brent crude climbing 1.31% to $73.32 per barrel, and West Texas Intermediate crude (WTI) rising 1.2% to $69.34 per barrel.
However, this comes after a sharp drop for three consecutive days, marking a significant weekly decline of 8.37% and 9.31% for Brent crude and WTI respectively.
On the other hand, Kelvin Wong, a senior market analyst at OANDA in Singapore, stated that the expectations of potential supply cuts at the next OPEC+ meeting in June have provided some support to prices.
Notably, WTI fell sharply yesterday below $63 before quickly bouncing back up by around 7.16% from the daily low. Kelvin Wong stated that this steep intraday decline in WTI crude futures has managed to stall at a key major support of US$61.85.
Additionally, the U.S. dollar index (DXY) fell 0.27% today, the weakening U.S. dollar, which makes dollar-denominated oil cheaper for investors holding other currencies, has also contributed to the rise in oil prices.
Market participants are now watching the U.S. Non-farm payroll (NFP) data for April due at 05:30pm Pakistan standard time, with market analysts estimating 180,000.
