Oil jumped the most since early February and restored key technical levels after US government promises to protect bank depositors calmed markets.
(Bloomberg) — Oil jumped the most since early February and restored key technical levels after US government promises to protect bank depositors calmed markets.
The commodity snapped its longest stretch of being oversold on the nine-day relative strength index since November 2021 as Treasury Secretary Janet Yellen said the government could take drastic actions to protect depositors at smaller lenders. Crude prices were further boosted by Russia saying it will extend its 500,000-barrel-a-day crude output cut through June.
Prices have been stuck in a narrow alley in 2023 before breaking lower as banking turmoil amplified recession fears. Still, senior figures in the industry predict prices rallying to range between $80 and $140 a barrel for the second half of the year.
Read More: Top Oil Traders Say Crude Prices Won’t Stay Down for Long
The Federal Reserve’s interest rate decision on Wednesday and its expected effect on the economic environment is likely to move crude prices further, said Vikas Dwivedi, global oil and gas strategist at Macquarie Group Ltd.
“If these big macro factors start to really turn the corner, oil will rally,” Dwivedi said.
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–With assistance from Julia Fanzeres.
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