![](https://blog.trive.co.za/wp-content/uploads/2024/01/inv-1024-x-512-px-52.png)
The WTI Crude Oil Futures (NYMEX: CL) have embarked on a promising trajectory, initiating the trading session with a robust surge of nearly 50 basis points on Thursday. This bullish momentum finds its roots in a harmonious blend of factors steering market sentiment.
Foremost, OPEC’s optimistic outlook, as outlined in their monthly report, forecasts a formidable 1.85 million barrels per day (bpd) surge in global oil demand by 2025, reaching 106.21 million bpd. Simultaneously, unyielding geopolitical tensions in the Middle East contribute to supply-side concerns, keeping the market buoyant. Furthermore, extreme cold weather in North Dakota, a key U.S. oil-producing state, has led to a steep 650,000 to 700,000 barrel bpd reduction in output, amplifying supply constraints.
However, an unforeseen uptick in U.S. crude oil stockpiles, growing by 0.483 million against anticipated drawdowns, coupled with an underweight economic recovery in China, casts shadows on the oil demand landscape, tempering potential upside gains.
Technical
The WTI Crude Oil Futures find themselves trapped in a persistent downtrend, artfully depicted by the price languishing beneath the 100-day moving average on the daily chart.
Amid this descent, a noteworthy interplay of key levels has emerged. Witnessing a resurgence from oversold RSI conditions, the price found solace at $67.71 per barrel (BLL), marking a supportive foundation. However, aspirations for higher grounds faced a formidable obstacle at $76.18 BLL, triggering a retracement as selling pressure eclipsed buying impetus.
Navigating these levels, the price retraced, discovering a formidable stronghold at the 61.80% Fibonacci Retracement Golden Ratio, a level previously tested in January. Amid diminishing volumes and a fluctuation around the 100-day moving average, a symmetrical triangle has materialized, encapsulating the price in a consolidation phase, indicative of indecision. A breakout from this pattern on high volumes could orchestrate a directional move, with the support and resistance levels serving as potential destinations, depending on the direction of the breakout.
![](https://blog.trive.co.za/wp-content/uploads/2024/01/image-44-1024x466.jpeg)
Summary
In conclusion, the WTI Crude Oil Futures are torn between OPEC’s optimistic demand forecast and supply-side concerns. Technical levels, including the $67.71 and $76.18 per barrel levels, underscore the delicate balance. The impending breakout from the symmetrical triangle holds the key, with support and resistance levels guiding potential market directions.
Sources: OPEC, American Petroleum Institute (API), Reuters, Dow Jones Newswires, TradingView
Piece Written by Nkosilathi Dube, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.