The price of a barrel of Crude oil climbed over 0.50% on Thursday, traveling from a low of $55.38 to a high of $56.47 per barrel. Prices have climbed to the highest levels in around a month on supply-side factors considering an unexpected weekly decline in US crude supplies. Crude markets got a lift from the bullish EIA inventory data released on Wednesday. The EIA reported supplies dropping for the first time in six weeks, down 1.7 million barrels for the week ending October 18th, something which OPEC+ will be looking at deepening their output cuts at the December meeting. Additionally, the latest trade headlines have been on the brighter end of the scale and should they continue to gain positive traction, as the belief grows that a potential US-Sino trade deal is in the making, along with easing central banks, the backdrop could be more bullish for oil prices as global downturn is averted.
After consolidating in the same range since last week, Crude oil prices surged during Wednesday’s session and continued to print new highs during yesterday’s session, printing a high of $56.47 per barrel. The price is currently trading just above the $55.92 support level with a bullish momentum. However, The RSI chart shows a potential weakness in the momentum as a divergence between the price and the momentum has emerged. On that note, we will be focusing on the downside and we will be watching the $55.06 support level.
Support: 55.06/ 54.42
Resistance: 55.92/ 56.27