Oil hits 5-month high to hit $70 before slipping back below that level…

Oil continues its strong year-to-date rally, as global benchmark Brent crude managed to climb above the psychologically important $70 per barrel level before losing some mojo and falling below that mark. Brent crude is up nearly 27% so far year-to-date.

Thursday’s move, which came late in the day, showed that investors continue to respond to the increased levels of tightening in the global oil market, at least partially due to the surprising show of unity that OPEC and its allies continue to exhibit via their relative adherence to caps on production.

Brent crude is up nearly 27% so far year-to-date.

Several factors probably came into play to conspire to push the commodity back down below the $70 line.

Profit taking is all but inevitable when a stock or commodity breaks a resistance level for the first time in a while. And there remains a lot of uncertainty regarding global growth, as the current slowdown in the world economy could easily contribute to a decrease in demand for crude.

On the other hand, a new round of sanctions could be imposed on another key producer, Iran, but that decision won’t happen until the end of April, when the Trump administration makes that call. If it does happen, it could continue to push oil higher.

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The chaotic landscape over in Venezuela also is contributing to the bump in prices, as questions remain regarding its ability to maintain production levels.

So, with all the macroeconomic factors going on out there including political unrest in the major oil producing country Libya, that $70 level could be revisited fairly soon

Brent crude for June settlement ended up closing at $69.40 for a gain on the day of $0.09.

Meanwhile, US benchmark West Texas Intermediate saw its May futures contract, the most widely traded on the New York Mercantile Exchange, end the day at  $62.10 a barrel. That was a loss of $0.36 per barrel.

https://www.bloomberg.com/news/articles/2019-04-03/oil-rally-takes-a-breather-after-u-s-crude-supplies-increase?srnd=premium