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.
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.
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
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.