Jakarta, GIC Trade – World crude oil prices have increased in early Asian trade on Wednesday, recovering from the previous day's losses, as OPEC's stronger outlook on Chinese demand helped offset bearish global investor sentiment after the recent U.S. bank failure.
 
"The oil market has bounced back on its own after the recent sharp decline," said Toshitaka Tazawa, an analyst at Fujitomi Securities, adding some investors have taken advantage of the decline to hunt for bargains.
 
Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) on Tuesday raised its forecast for China's oil demand growth in 2023 due to the easing of Covid-19 restrictions in the Bamboo Curtain country, although it kept total global demand stable, citing potential downside risks for world growth.
 
Meanwhile, U.S. crude inventories rose by about 1.2 million barrels in the week ended March 10, while fuel stocks fell, according to market sources citing American Petroleum Institute figures on Tuesday.
 
On the supply side, Saudi Arabia's energy minister Prince Abdulaziz bin Salman told Energy Intelligence in an interview on Tuesday that the OPEC+ alliance including Russia will stick to the production cuts agreed in October until the end of the year.
 
Fundamentally, the outlook for crude oil demand from China has supported rising oil prices, while production cuts from OPEC+ have also supported prices. Then how technically, see the following analysis:
 

Technical Analysis

 
Oil prices in the 4-hour period fell further testing the 71.46 support area towards the next support level at 69.87, which is indicated by the MA50 line which has crossed the MA100 line from above. Meanwhile, to turn the bias into bullish, oil prices need to cross the resistance level of 73.24 to the next resistance level at 73.97, which is confirmed by the CCI which is already in the oversold area.

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