WTI oil futures extended the rally after a brief pause and hit 62.53 earlier today, its highest level since May 2015.
Prices have been rising steadily since late December from the mid-58 handle and successfully breached the key 60 mark for the first time in 2 ½ years. Upside momentum has faded and the market has stabilized around the 62 level. The drop down to the low 61s did not yield significant additional weakness and prices bounced back up.
The level at 61 is seen as minor support now and below this the focus turns to the psychological level at 60, which is considered to be strong support.
Failure to hold at 60 would see prices move back into an important consolidation area between 59.50 and 60. Any move lower from this zone would likely see more sellers enter the market. Continued downside momentum would target 58.50. Breaking this support would take WTI back into its prior range (from late November to December).
The bullish phase that began from late December off the mid-58 area is still in progress and there are no signs of a reversal in the trend as long as the market remains above the 60 level. Another attempt upwards and a successful break above today’s peak of 62.53 could see the next major resistance coming at the 64 level.
