As we approach the final stages of the first week of trading in March, one financial instrument that is catching my eye at present is WTI Oil, with the commodity caught repeatedly battling with what we see as huge psychological resistance at $35 throughout the week. There does appear to be some renewed appetite from investors to purchase WTI oil.Buyers are showing signs of resilience towards not giving up on a stronger price recovery, because despite WTI coming under heavy pressure following another increase in stockpiles in the United States from the weekly US inventory report, WTI still managed to rally to a near two-month at $35.14 before the US session closed.
I do think there is potential for a bullish reversal if you look at the price charts for WTI from a technical standpoint, and traders need to be carefully monitoring the price of WTI at $35 as a key signal for where the price of the commodity could next be heading when it comes to price direction. Make no mistake, $35 is a superior psychological level for the commodity and if WTI manages to close trading for the day above $35 this opens up the gates for further moves higher in price, with this obviously providing a boost to any exporters of the commodity. It is however important to point out that WTI Oil did not manage to close trading for the day above $35 yesterday despite rallying above this level during the US session yesterday, meaning thatwe are likely to see the price come under pressure as the European trading session gets underway.
Moving forward, we strongly emphasize that $35 is a huge psychological level for WTI Oil and have been repeating this for over a month. If we don’t conclude trading above $35 soon, another significant move to the downside could be exposed once again. This is exactly what happened in January when WTI failed to close above $35, with the consequence being another aggressive round of selling that led to the commodity hitting another multi-year low narrowly above $26.
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