IEA: Global Oil Supply in May 13.6 Million Barrels Below Pre-War Level

Although the news indicates ongoing supply constraints, the price is already in a downtrend. The RSI is in weak territory at 44, the MACD is below the signal line and negative, and the SMA20 has fallen below the SMA50, confirming short-term weakness. While reduced supply may provide support in the long term, the technical outlook remains bearish in the near term.

The news indicates that global oil supply remains well below pre-war levels, pointing to a supply squeeze. Although Exxon Mobil (XOM) shares have fallen 4.4% in the last 24 hours, the RSI at 37 is approaching oversold territory, and the MACD is beginning to cross above its signal line. These technical recovery signals, combined with the positive fundamental impact of supply constraint news, suggest a potential upward move in the short term. However, since the downtrend has not yet been fully broken, the rally risks remaining limited.

Although the news indicates ongoing supply constraints, prices are already declining and technical indicators are weak. The RSI is approaching oversold territory at 33, while the MACD is below the signal line and in negative territory. The price is trading below both the 20-day and 50-day moving averages. In the short term, the downtrend is likely to continue, though some recovery may be expected due to oversold conditions.

Although the news points to a tightening in oil supply, which is theoretically positive for oil companies like BP, the stock has fallen 4.5% in the last 24 hours, with its RSI approaching oversold territory at 30.3. The MACD remains below the signal line and in negative territory, while the price is trading below both the 20-day and 50-day moving averages. Given the weak short-term momentum indicated by technical indicators, the supply constraint news may be insufficient to lift the price. Therefore, a neutral stance is recommended due to directional uncertainty.