Oil Price Analysis: WTI has gushed higher after yet another rejection of $40

WTI 1-hour chart

WTI has bounced back from its lows on Monday morning of near USD 39.75 per barrel. For the entire EU and US session, the liquid gold has been rising and just hit a session high of USD 41.32 per barrel. There has not been any major newsflow but OPEC crude production rose 900k barrels per day month on month to 23.43mbpd in July in Bloomberg survey. The market could have been expecting more of a drastic rise due to the tapering of the OPEC+ cuts.

Looking at the chart, WTI is coming up to an important technical level. The black downward sloping trendline has been used three times on the chart already and a break could mean the price is heading back to higher levels. The price has now stalled at the mean value area of the previous consolidation. The key level of that consolidation other than the main high is the red resistance zone at USD 41.63 per barrel. 

The indicators are looking very positive at the moment, The Relative Strength Index is in the oversold area and this could mean there is a short term pullback. The MACD is also looking bullish as the histogram is in the green and the signal lines are above the middle zone. 

Overall, the price is in an uptrend but there seems to be some hesitation whenever the price gets near the highs of USD 42.49 per barrel. It will be interesting to see if this time the bulls can gather enough momentum to test the area. This could be difficult if there is a second COVID-19 and the OPEC+ group continue to taper off their production cuts.

Additional levels