WTI continues the recovery from the rising wedge bearish breakout, targets $56 handle
- WTI is making its way back to bullish territory, but still a way to go before bulls can gain full confidence again.
- WTI is currently trading at $54.29/bbls, up from a low of $53.61bbls, below the $55.01 high.
Unfazed by data showing a fourth straight weekly rise in U.S. crude supplies, WTI has continued in its recovery from the rising wedge bearish breakout which is yet to materialise into a downside continuation of the early 2018 October lows.
Speculators are buying into the February dip on reports of further reductions to global output and optimism around constructive U.S./ Sino trade negotiations bolstered prices.
On recent data, the International Energy Agency, (IEA), said in a monthly report that global supply fell by 1.4 million to 99.7 million bbls per day in January, also revealing that domestic crude supplies rose by 3.6 million barrels for the week ending Feb. 8, beating the 2.7 million-barrel rise expected and following the American Petroleum Institute data that showed a decline of 998,000 barrels. Also on Tuesday, a monthly EIA report gave higher U.S. crude production forecasts for 2019 and 2020.
Eyes on trade talks
On the geopolitical front, Trump was reported to be willing to delay the March 1 deadline he previously proposed for Sino/US trade talks if negotiations with Beijing stay on track. Lower level trade talks are currently ongoing in Beijing but trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will arrive on Thursday and Friday to meet with their counterpart, Chinese Vice Premier Liu He, who is the top economic adviser to President Xi Jinping.
WTI levels
The technical outlook remains bearish while below the rising wedges support line, although the rise above the 23.6% Fibo retracement is somewhat bullish. However, a break of 51.50 and the 27th Jan fractal low will open a run to 50.63 as the last defence for 50 the figure and 7th Jan swing high at 49.96. On the wide, the bottom of the prior trend is down at 42.54 (top of reverse H&S head). Bulls need to hold above 54.50 for prospects of the 56 handle and placement back into the rising wedge once the recent highs at 55.89 are broken, targeting 60.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
