The WTI Crude Oil Futures (NYMEX: CL) recently snapped a four-day losing streak, marking a 3.30% surge on Wednesday due to mounting concerns on the supply side.
These worries were amplified by escalating tensions in the Middle East, disruptions in Red Sea shipping routes, and protests causing oilfield disruptions in Libya. Further boosting oil prices was data from the American Petroleum Institute, revealing a substantial 7.4 million barrel decrease in crude inventories, twice the expected decline, indicating robust demand.
The upcoming EIA Crude Oil Stocks Change and the Nonfarm Payrolls report hold significant anticipation for the week, likely dictating the near-term trajectory of oil futures. These events promise to wield considerable influence over the commodity’s short-term movements.
Technical
The WTI Crude Oil Futures have recently traced a downward trajectory, defined by trading below the 100-day moving average within a descending channel pattern.
However, a notable shift in sentiment has emerged, prompting a rebound in the oil futures. This turnaround coincided with a pivotal support level forming at $67.71 per barrel (BLL) positioned at the lower boundary of the descending channel, complemented by oversold RSI conditions.
Subsequently, an upward surge directed the oil futures toward the channel’s upper boundary, yet the momentum faltered amid declining upside volumes. This shift resulted in a reversal, marking a resistance at the $76.18 BLL level. The downturn retraced but halted at the 61.80% Fibonacci Retracement Golden Ratio, forming a reversal point.
If this reversal maintains upside momentum, a potential retesting of the $76.18 BLL level could ensue upon breaching the channel’s upper boundary. Conversely, a downside scenario might consider the 50% level as a focal point should bearish pressures weigh on oil futures.
Summary
The recent rebound in the WTI Crude Oil Futures comes on the heels of escalating supply concerns driven by geopolitical tensions and disruptions in key oil-producing regions. Technical indicators suggest a shift in sentiment, showcasing a potential rebound from crucial support levels. Market focus remains keen on upcoming reports, notably the EIA Crude Oil Stocks Change and Nonfarm Payrolls, which are expected to influence oil’s immediate direction, balancing market sentiment with fundamental data.
Sources: American Petroleum Institute, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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