- WTI bulls are in and have broken a 50% mean reversion level.
- If the bears were to commit, then there will be prospects of a move into $70.50s.
West Texas Intermediate, WTI, is currently trading at $71.93 and has traveled between a low of $71.03 and $74.33. Meanwhile, comments from Russia's oil minister, who said next month's OPEC+ meeting was unlikely to end with further cuts to production, have weighed on the black gold.
Reuters reported Russian oil minister Alexander Novak said further cuts from OPEC+ were unlikely following more than one-million barrels per day of voluntary cuts that took effect at the start of May.
´´The likelihood of OPEC cutting further only a month later is low. Signs of stronger demand should provide some comfort to bullish speculator,´´ analysts at ANZ Bank said. ´´Chinese demand is growing strongly as restrictions on international travel into China are eased. The rise in gasoline demand in the US comes ahead of the US holiday weekend.´´
Meanwhile, analysts at TD Securities explained that´´Saudi Arabia's warning shot to short sellers managed to squeeze CTA trend follower shorts, but only for a single trading session. WTI crude and Brent crude prices are now catching up with the ongoing deterioration in commodity demand trends, after a large-scale short covering program from algorithmic trend followers provided a sufficiently large offset for prices to buck the trend.´´
´´With price action already turning over, CTAs are likely to aggressively add back some shorts. In fact, we estimate that algos are set to add a whopping -21% of max size to their net short in WTI crude, along with -11% in Brent. This flow will help give credence to the slumping demand narrative, as China continues to battle with a surge in Covid-19 infections,´´ the analysts explained further.
WTI technical analysis
The bulls have moved in and are reaching a resistance area, breaking a 50% mean reversion level. If the bears were to commit, then there will be prospects of a move into $70.50s.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady above 1.0800, looks to post weekly losses
EUR/USD trades marginally higher on the day above 1.0800 after the data from the US showed that Durable Goods Orders declined by 0.8% in September. Nevertheless, the pair remains on track to close the fourth consecutive week in negative territory.
GBP/USD extends recovery to 1.3000 area
GBP/USD extends its recovery and trades at around 1.3000 in the American session on Friday. The US Dollar struggles to gather strength as the market mood remains positive heading into the weekend, allowing the pair to hold its ground.
Gold fluctuates in narrow range below $2,750
Gold stays in a consolidation phase and fluctuates in a relatively tight range below $2,750 on Friday. US Treasury bond yields stabilize in the American session, making it difficult for XAU/USD to gather directional momentum.
Crypto Today: XRP, Bitcoin and Ethereum decline as Ripple files response to SEC appeal
XRP loses over 1.30% as Ripple's executive confirms the filing of an important document in the appeals process in the SEC lawsuit. Bitcoin corrects less than 1% and sustains above $67,500. Ethereum is down nearly 0.20%, holding above the key support level of $2,500.
US elections: The race to the White House tightens
Trump closes in on Harris’s lead in the polls. Neck and neck race spurs market jitters. Outcome still hinges on battleground states.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.