Oil surged over 1% on the back of stronger Chinese economic numbers and signs of tightening supply.
Data showed that manufacturing in China unexpectedly rebounded in March, after three straight months of contraction. This has eased concerns over a slowdown in the world’s second largest economy. As a result, demand expectations have increased.
Activity in US manufacturing sector also picked up by more than forecast.
On the supply side, ongoing production cuts by OPEC and Russia, in addition to continued sanctions on Iran and Venezuela have meant that oil supply sunk to a four year low in March.
Oil has pierced through $60, hitting a high of $61.14, a level last seen in November. After the first three months of 2019 proved to be the best for oil in over a decade, we could be in for another stellar quarter. Given the fundamentals oil to $70 doesn't look unreasonable in the medium term.
Oil is trading above its 50 SMA and 100 sma on the daily chart, 4 hour chart and 30 minute chart. This indicates a bullish bias. Should oil push above resistance at $61.20, the price could extend higher towards resistance at $61.60 and then $62.00. On the downside support is seen at $59.60.