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Crude Oil Reaches 2-Month High, As Global Economy Keeps Improving

Crude Oil remains bullish, as the improving global economy increases the demand for it

Skerdian Meta•Friday, May 28, 2021•2 min read
Now the highs from March are within reach

BUY WTI

Crude Oil has been really bullish since the crash in March-April 2020. Back then, it seemed like this was the end for crude Oil, with the renewable energy coming up. The plans and actions from the global elite for the renewable energy have stepped up since then, but crude Oil has been increasing nonetheless.

We saw a retreat in March, after US WTI reached $68 early that month, but the 50 SMA (yellow) held as support despite being pierced and the bullish trend resumed again. Last week we saw another retreat, but it ended right at the 50 SMA once again on the daily chart. So, the bullish trend continues and now Oil is heading for this year’s highs.

Crude Oil Live Chart

WTI

The improving global economy, especially as norther hemisphere reopens after a long winter of coronavirus restrictions is keeping the pressure up for almost all commodities, especially for energy products and crude Oil is benefiting form it.

The US Chicago PMI report increased further to 75 points today, confirming the great momentum in the US economy, while the PCE report for April was sort of mixed, but showed that inflation is increasing.

Highlights from the PCE report for April 2021:

US Core PCE yy
  • Prior was +1.8%
  •  PCE core MoM +0.7% vs +0.6% expected
  •  Prior MoM +0.4%
  •  Deflator YoY +3.6% vs +3.5% expected
  •  Prior deflator YoY +2.4%
  •  Deflator MoM +0.6% vs +0.6% expected
  •  Prior MoM deflator +0.5% (revised to +0.6%)
  • Full report
This is all a touch on the strong side but I think the market was braced or priced for something worse. The dollar has dipped on the data.

Consumers spending and income for April:

  • Personal income -13.1% vs -14.2% expected. Prior month +20.9%
  • Personal spending +0.5% vs +0.5% expected. Prior month +4.7%
  • Real personal spending -0.1% vs +0.2% expected. Prior month +4.6%
There were some upward revisions to March spending as the late-month stimulus checks came in. Spending held up into April but it’s it’s tough to separate stimulus money from the real economy and that will continue to be a challenge in the months ahead.
More details on inflation (y/y):
  • Goods +4.5%
  • Durable goods +5.2%
  • Services +3.1%
  • Energy +24.8%
  • Food +0.9%
The PCE report doesn’t offer the same level of detail as CPI so you can’t say how much of a factor things like the spike in car prices had. But, the PCE is higher nonetheless.
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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