The WTI oil price extends advance into seventh straight week, hitting new highest since October 2014 on Monday, extension of last week’s 3.6% advance.
Strong recovery in global oil demand on easing Covid restrictions and increased consumption on energy crunch that prompted a massive gas to oil switch for power generation, as gas prices skyrocketed.
Strong demand on colder weather in the north hemisphere would contribute to oil supply deficit that could further lift oil prices, as many market observers already talk about $100 per barrel in the short period.
Strong bullish structure on daily chart was additionally supported by break above the upper borderline of bull-channel from $61.80 (Aug 23 trough), but overbought conditions on daily and weekly chart, warn that bulls may lose steam in the coming sessions and consolidate before resuming larger uptrend.
Strong positive sentiment suggests shallow consolidation, with extended dips expected to find ground above strong $80 support zone and provide better levels to re-join larger uptrend.
Bulls eye initial target at $85.24 (FE 200% of the third wave of five wave sequence from $61.80) which guards $89.25 (Fibo 76.4% of $114.80/$/6.52 fall) and psychological $90 level.
Res: 83.85; 85.24; 85.90; 88.61.
Sup: 82.61; 81.86; 80.35; 80.00.