The commodity is having a bad year as monetary tightening, the banking turmoil, worse than expected recent data from China and other factors, have created fears around global demand. This culminated to a seventeen-month low in early-May, but has rebounded since and managed to post its first profitable week in a month, while staying on the front foot during the current one.
The latest boost comes from the massive draw in the weekly US Stockpiles as Tuesday's API report showed and the comments by the Energy Minister of Saudi Arabia, the de facto leader of OPEC and one of the world's top oil producers. During the Qatar Economic Forum, Prince Abdulaziz bin Salman cautioned speculators that "they will be ouching" and warned them to "watch out". 
Saudi Arabia and other OPEC+ countries had announced massive output cuts in early April, on top of the preexisting reduction plan, which bring the total cuts to over 3.5 million barrels/day until the end of 2023 . This latest round kicked in this month and the International Energy Agency (IEA) expects it to drive "steeper losses" in oil supply in May, according to last week's report. 
Furthermore, IEA has largely dismissed worries over China's recovery, since it raised its demand outlook, now forecasting an increase by 2.2 million barrels/day this year, with the world's biggest importer accounting for 60% of that growth. As such, it anticipates "tighter market balances" in the back-half of the year.
USOil gains around 3% this week and steps into a critical technical area, defined by the EMA200, the lower border of the Ichimokou Cloud and the 50% Fibonacci of the April high/May low slump. This gives it the chance to to push for the upper border (at around 77.00-70), but we are bit cautious at this stage around the ascending prospects and its ability to tackle 80.95.
Optimism has prevailed so far in regards to the US debt ceiling negotiations, but the lack of solution as we get closer to the early June estimated deadline before the government becomes unable to pay all of its bills, could weigh on oil prices. Furthermore, a series of mostly hawkish comments by Fed voters, has led to repricing around the policy path, with markets seeing less cuts this year, without ruling out one more hike.
More to it, the Relative Strength Index (RSI) moves towards overbought levels and this could put pressure on USOil. As such, a fall below 69.38 would not be surprising, but we struggle to see sustained weakness and a challenge 62.42-61.72.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 24 May 2023 https://www.youtube.com/watch
Retrieved 24 May 2023 https://www.opec.org/opec_web/en/press_room/7120.htm
Retrieved 28 Feb 2024 https://www.iea.org/reports/oil-market-report-may-2023