WTI oil was the top performer of the Asian session on Monday as the contract opened with gap higher ($5) and spiked to new four-month high at $63.23. Oil markets were hit by the attack on oil facilities in Saudi Arabia during the weekend that caused strong reaction and pushed oil price significantly higher. Oil price eased during Asian trading and dipped below $60 handle in early Europe after President Trump authorized the use of oil emergency stocks to ensure stable supply that eased strong bullish pressure.
Overall sentiment has changed, as rising fears of escalation of existing tensions between Iran and the US, turned near-term mode to bullish.
Today’s strong jump fully retraced last week’s nearly $5 fall and signals continuation of an uptrend from $50.53 (7 Aug low).
Former highs at $58.74/81 (10Sep/31 July) now turned to significant supports and holding the action for now, guarding another pivotal support at $58.40 (Fibo 38.2% of $50.53/$63.26), with the zone expected to ideally contain and keep fresh bulls intact.
However, profit-taking after overnight’s rally may keep near-term action under pressure and extend pullback.
Weekly cloud base ($57.80) and 100DMA ($57.08) mark next significant supports.
Daily studies turned to full bullish setup and maintain strong positive momentum that adds to positive outlook, boosted by worsening geopolitical situation in the Middle East region. Fresh advance broke above key barriers at $60.45/96 (Fibo 61.8% of $66.58/$50.53/15 July former high) but needs close above to generate fresh bullish signal.
Res: 59.62, 60.00, 60.45, 60.96
Sup: 58.78, 58.40, 57.80, 57.08