WTI capped in bullish territory, RSI confirm further upside
|- WTI capped at multi-year highs, 10-D SMA is the first line of key support.
- Geopolitical angst and supply concerns help boost the price of oil.
The price of oil had been making fresh highs on Thursday. WTI rallied to $72.37 bbls. Currently, however, it trades at $71.37bbls, below the 10 4-hr SMA and has made a recent low of $71.21 bbls, held up at the 21-4hr SMA within the rising channel, supported by the 10-D SMA.
Oil got a boost today on the back of geopolitical risks and strong global demand during the US driving season. Brent crude rallied t above $80 a barrel due to Washington’s decision to reinstate sanctions on Iran, sending prices to their highest levels since 2014. Both WTI and Western Canada Select extend their rallies to fresh multi-year highs as well.
On the geopolitical front, the U.S. has said it is possible there will be secondary sanctions imposed on European companies who continue to deal with Iran and European companies are already starting to pull back from Iran. The French energy major Total SA said Wednesday that it would withdraw from a major gas project in Iran this year if it wasn’t granted a waiver by the U.S. However, it begs the question as to the extent to which a return of U.S. sanctions will limit Iranian oil production, but at this stage, it seems that the U.S. has a strong hand over it.
IEA revised lower its outlook for global oil demand for 2018
IEA has revised lower its forecasts for global oil demand for the current year to 1.4 mbpd from 1.5 mbpd. On Friday, driller Baker Hughes will report on the US oil rig count.
WTI levels
73.00 comes as the psychological level in WTI ahead of 77.80 around the 21st Nov 2014 high. On the flip side, $70.64 (10-day SMA) guards $69.27 (21-day SMA) and 66.86 (low as of 1st May). RSI on the daily, weekly and monthly sticks has room to go overbought.
DXY still correlates, warning to bulls as dollar reaches toppy levels in a correction within broader bear trend - time for a bearish correction?:
- WTI and DXY breaking the rules, investors wait to see if correlation can last
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.