WTI Price Analysis: Finds bids below $82 as Saudi to continue with voluntary oil cuts

The oil price discovers buying interest as Saudi Arabia will continue with voluntary cuts despite deepening Middle East tensions.
Risks of a tight oil market persist as an intervention from Iran in the conflict would be followed by sanctions on Iranian oil by the US.
WTI stays below the 61.8% Fibo retracement, which is around $83.88

Sagar Dua FXStreet

West Texas Intermediate (WTI), futures on NYMEX, rebound after a steep correction to near $82.00 in the London session. The oil price attempts recovery as Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said on Thursday, “We will continue voluntary cuts until year’s end.”

On Wednesday, the oil price dropped sharply as investors anticipated that the impact of the Israel-Hamas conflict would be limited as Israel is not a major oil exporter. While risks of a tight oil market remain persistent as the intervention from Iran in the conflict would be followed by sanctions on Iranian oil by the United States. This would tighten the already tight oil market further.

Going forward, investors will focus on the official weekly inventory data to be reported by the US Energy Information Administration (EIA) for the week ending October 6. On Wednesday, the American Petroleum Institute (API) reported a strong build-up of oil stockpiles by almost 13 million barrels.

The US Dollar Index (DXY) found an intermediate cushion near 105.50 as investors turned cautious ahead of the US inflation data. As per the consensus, monthly headline and core inflation rose by 0.3% in September.

WTI trades below the 61.8% Fibonacci retracement (plotted from August 24 low at $77.53 to September 28 high around $94) at $83.88 on a four-hour scale. The 20-period Exponential Moving Average (EMA) at $83.5 is acting as a barricade for the oil price bulls.

The Relative Strength Index (RSI) (14) rebounds into the 40.00-60.00 range, which signals a consolidation ahead.

A fresh upside would appear if the oil price breaks above the 50% Fibo retracement at $85.80, which would drive the asset toward September 26 low at $87.74, followed by the psychological resistance at $90.00.

In an alternate scenario, a breakdown below October 6 low at $80.63 would expose the asset to August 29 low at $79.21 and August 24 low at $77.53.

WTI four-hour chart

WTI US OIL

Overview
Today last price	82.94
Today Daily Change	0.77
Today Daily Change %	0.94
Today daily open	82.17

Trends
Daily SMA20	87.92
Daily SMA50	84.81
Daily SMA100	78.97
Daily SMA200	77.49

Levels
Previous Daily High	85.04
Previous Daily Low	81.91
Previous Weekly High	90.88
Previous Weekly Low	80.63
Previous Monthly High	93.98
Previous Monthly Low	83.09
Daily Fibonacci 38.2%	83.11
Daily Fibonacci 61.8%	83.85
Daily Pivot Point S1	81.04
Daily Pivot Point S2	79.91
Daily Pivot Point S3	77.91
Daily Pivot Point R1	84.17
Daily Pivot Point R2	86.17
Daily Pivot Point R3	87.3

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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