WTI oil price new highest in more than ten months in early Monday, in extension of last week’s 4.4% advance.
Several factors continue to fuel strong bullish sentiment, with decision of Saudi Arabia and Russia to extend their additional production cut in the fourth quarter, being the main contributor to tight supply outlook towards the end of the year.
In addition, signs of faster recovery in demand from China, world’s largest oil importer and still resilient US economy, continue to boost oil prices.
Bullish technical picture on daily and weekly chart add to positive outlook, as the contract registered a weekly close above important Fibo barrier at $89.17 (38.2% of $130.48/$63.63 downtrend) as well as close above psychological $90 level (for the first time since the last week of Oct 2022), marking strong bullish signals.
Bulls eye next targets at $93.28/72 (Oct/Nov peaks) $94.00 (weekly cloud top), ahead of $97.06 (50% retracement), with many already speculating of possible attack at $100 barrier on stronger bullish acceleration.
However, strongly overbought conditions on daily chart warn that bulls may take a breather for consolidation, which should be shallow in current bullish environment.
Broken barriers at $90.00 and $89.17 reverted to solid supports, along with rising 10DMA ($88.65) which should ideally contain dips.
Caution on break here, which would signal deeper correction and expose lower pivot at $85.10.
Res: 92.82; 93.72; 94.00; 95.02.
Sup: 90.00; 89.17; 88.65; 86.14.