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
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
