BRN to recover above 21-period SMA (~$82.793/bbl)?

BRN bulls are attempting to recover from yesterday's (May 30th) sharp slide following comments from US Fed officials.
 

A cautious stance on the future of interest rate policy contained in the Dallas Fed President's commentary underscored the possibility of key interest rates remaining higher for longer.

Keeping rates higher for longer could potentially reduce economic activity and thus the demand for oil.

An unexpected rise in the EIA gasoline stock change (+2.022M vs. 0.40M expected) also weighed on oil prices, suggesting weaker demand ahead of the key summer driving season in the US.

However, both the API and EIA crude oil inventories changes came in much lower than expected (-6.49M vs. +1.90M expected & -4156M vs. +1.95M expected respectively), suggesting potentially strong demand for crude.

On the demand side, OPEC+ is expected to maintain the current production cuts at 5.86M bbl/day.

According to Bloomberg consensus, BRN is expected to average $83.96/bbl in Q2 2024.

Any geopolitical turbulence, especially on the logistical routes, could provide significant support to oil prices.

The technical outlook for the BRN may be bearish in the medium term due to the risks of interest rates staying higher for longer as well as a sudden rise in EIA gasoline inventories, suggesting weaker demand.

On the upside, the 21-period SMA is a major resistance level - a target for the BRN bulls, while on the downside, the $81/bbl level may provide immediate support.

The Relative Strength Index (RSI) is floating in the neutral zone, indicating that the market is cautious ahead of key U.S. macroeconomic data.