WTI oil price dipped on Wednesday after news that Iraq resumed oil exports via pipeline to Turkey’s East Mediterranean port, temporarily changed the sentiment (oil was up around 2% on Tuesday.
Optimism over the latest measures (Iraq resumes oil export, release of strategic reserves and lifting sanctions on sales of Russian crude oil) may not be sufficient to significantly change the situation.
Escalation of the conflict in the Middle East and threats that Strait of Hormuz (key route for transport of oil from several countries in the Persian Gulf) would be blocked for longer period, would further destabilize global oil supply and push prices much higher, after oil spiked to $120 in immediate reaction.
Bullish technical picture on daily chart (strong positive momentum/MAs in full bullish setup with converged 100/200DMAs about to form bull cross) continue to underpin the action, though RSI remains in overbought territory and may obstruct bulls.
Broken Fibo 38.2% of $119.44/$76.79 pullback ($93.08) reverted to solid support which holds dips for the fourth straight day (four consecutive daily closes above this level), pointing to formation of a higher base.
Today’s quick recovery after the price dipped to $91.44 (bounce cracked next barrier at $98.12, Fibo 50%) suggests that bulls regained traction and prepare for renewed attack at psychological $100 barrier, after Monday’s attempt stalled on approach ($99.68).
Sustained break of $100 level to signal bullish continuation (bull-leg off $76.79 correction low) and expose targets at 103.15 (Fibo 61.8% of $119.44/$76.79) and $104.28 (upper 20-d Bollinger band), with stronger acceleration to unmask 109.37/110.00 (Fibo 76.4%/round-figure).
Res: 99.68; 100.00; 103.15; 104.28.
Sup: 96.00; 94.80; 93.08; 90.98.
