The global oil benchmark is taking cautious steps higher while push and pull factors are still in play.

Hopes that peak US interest rates is drawing close, coupled with the optimism surrounding China’s economic reopening, are placing Brent on course for a third successive weekly gain.

The prompt spread for Brent is also making another attempt at backwardation – a bullish sign – having been sent into contango – a bearish pattern – for the most part since late November.

Having broken past its 50-day SMA and its upper downtrend line of late, Brent’s ascent is being halted for the time being by its 100-day SMA, with the 23.6% Fibonacci level from its 2022 descent lurking just above.

Brent bulls are being forced to bide their time as recession fears still loom large, despite the hopes for China’s economic rebound while supply risks surrounding Russian output can’t yet be ruled out.

Although OPEC+ is widely expected to keep its output levels unchanged next week, the alliance has demonstrated a knack for springing surprise supply interventions to boost oil prices.

However, if the Fed next week slams home its hawkish message, that may force oil prices to unwind recent gains stemming from fears that central banks are willing to invoke more economic pain, all in the name of subduing still-stubborn inflation.

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