The market continues to favor higher oil prices, however the strength of the US dollar and Turkey-inspired risk aversion has provided a bit of a drag on crude oil. Oil prices increased slightly on Friday after the IEA upgraded demand forecasts for 2018 and 2019. However we closed the week lower for the 6th week now. Escalating tensions between China and the United States continue to weigh on prospects of global demand for crude. Looking ahead to the rest of the day, OPEC is set to issue their monthly oil report today on the same day as the EIA’s monthly Drilling Productivity Report which might provide a clue to where we might go next.
Based on last week’s close at $66.94, the direction of the October WTI crude oil futures contract this week is likely to be determined by trader reaction to the short-term 50% weekly retracement level at $66.95. The main trend is up according to the weekly swing chart, however, momentum has been sideways for six weeks now. The price action is also being controlled by a pair of retracement zones: $68.25 to $69 is providing resistance and $67 to $65.95 is providing support.
Support: 65.95 67.00
Resistance: 68.25 69.00