Brent climbs to 4-month high

Oil benchmarks have been lifted to their highest levels since November 2023.

Here's why:

• The International Energy Agency’s altering of its 2024 outlook from a surplus to a global supply deficit helped Brent break out of its year-to-date trading range.
   
• US crude inventories posted their first drop since January, which added to oil’s tailwinds.

And with its 14-day relative strength index (RSI) yet to break into "overbought" territory, Brent may yet have more room to explore to the upside.

Brent bulls could be given another shot in the arm if the Fed does stick with its projections for three 25-basis point rate cuts this year, which should in turn shore up US demand for oil.

However, perceived delays to Fed rate cuts past June, coupled with still-sluggish Chinese economic recovery, could greatly limit the potential upside for oil prices.