WTI retreats from multi-year highs at $85.35, returns to $84.00
|- Crude oil futures give away gains after hitting fresh highs at $85.35.
- The oil rally remains intact, boosted by concerns of an oil crunch.
- WTI: Testing support at $83.90 previous resistance.
Front-month WTI is losing steam on Monday’s US trading session after having climbed to a fresh seven-year high above $85.00 earlier today. Crude prices have retreated more than $1,00 so far, hitting session lows at $84.00 area and turning negative on daily charts.
Fears of an energy crunch are boosting oil prices
The West Texas Intermediate (WTI) futures remain moving within a solid upside trend, buoyed by concerns that the tight supply and increasing demand for crude, as the global economy recovers from the COVID-19 crisis, might lead to an energy crunch this winter.
A report from the US bank Goldman Sachs forecasting that we could be “at the beginning of a material repricing for higher oil” has contributed to boosting WTI prices to fresh highs. Goldman Sachs affirms that the UK benchmark Brent oil could hit $90 per barrel by the end of the year (about 4.5% above current prices), as demand is rebounding further and oil producers are dragging their feet to increase supply.
WTI prices about to test support at $83.90
On the downside, WTI futures might find support at the previous resistance level 83.90 (October 18 and 20 highs) below here, next potential targets might be at $82.50 and $81.50 (October 22 low).
Alternatively, if the mentioned 83.90 level holds, upside momentum would remain intact, to set another attempt to break intra-day high at 85.35, on its way towards the 90.00 psychological area.
Technical level to watch
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.