WTI has been recovering from the recent lows below the 55 handle scored earlier this month and has been knocking on the door of a critical technical level around recent highs en route to test territory in the mid 58 handle, the highest levels since mid-November. A nearly 4 million barrel decline in last week’s US crude supplies along with evidence that US oil production may be faltering is likely to keep the trend underpinned. Analysts at TD Securities explained the current situation as follows “Considering that the supply-side continues to lend a constructive narrative, we think the market will look past the disappointing data on the demand side. We still think the recent rally in crude has a more room to run, and are still comfortable with our $60/bbl”.
Crude oil prices continued to edge higher this morning almost reaching our target level at $58.9 per barrel. The price is currently trading just under it, and the momentum is still bullish although it is getting deeper in the overbought zone. We will expect some challenged at the moment for the price to continue with the the upward move, but we will be focusing on the $59.4 resistance level.
Support: 58.02 / 57.32
Resistance: 58.9 / 59.4