WTI Crude Oil futures (NYMEX: CL) struggle to find direction on Friday, poised for a flat weekly close amidst a tug-of-war between bullish and bearish factors. Earlier in the week, concerns over a prolonged interest rate hike scenario from the Federal Reserve and weakening demand expectations sent prices tumbling nearly 2%. The bearish sentiment was echoed by the IEA’s report highlighting a slowdown in global oil demand due to the shift towards renewable energy.
However, the tide started to turn later in the week as supply concerns resurfaced. Geopolitical tensions in the Middle East, particularly the ongoing Israel-Hamas conflict, added fuel to the fire. Additionally, data showing smaller-than-expected inventory builds in the US provided some support.
Technical Analysis:
On the 4-hour chart, the futures are currently at $78.12/BBL, hovering near the session lows., hovering near the ascending channel’s resistance. The price action trades above the 20-SMA (green), 50-SMA (blue), and 100-SMA (orange), indicating a short-term bullish bias. The RSI (54.23) sits comfortably above the 50.00 level, suggesting some upside potential remains.
The immediate support lies at the 23.60% Fibonacci retracement level ($77.15/BBL). A break below this level, with significant volume, could expose the 38.20% ($76.05/BBL) and 50.00% ($75.16/BBL) retracement levels. However, the resistance level at $79.29/BLL would come into play should the SMAs provide significant support. A decisive break above this level, backed by strong volume, could signal a bullish continuation towards $80.39/BBL.
Summary
WTI Crude Oil faces an uncertain path ahead. The technicals hint at a potential upside move if the bulls can overcome the immediate resistance at $79.29/BBL. However, support levels remain within reach, and a breakdown below $77.15/BBL could open the door for further downside.
Sources: TradingView, Trading Economics, Dow Jones Newswire, Reuters, S&P Global.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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