Oil prices rebound notably as Hurricane Sally prompted shut down of more than a quarter of production at the US Gulf of Mexico. Sally’s is moving a a very slow pace of 85 miles per hour, threatening historic floods from Mississippi to Florida Nearly 500,000 bpd of offshore crude oil production and 28%, or 759 million cubic feet per day (mmcfd), of natural gas output were shut in the U.S. Gulf of Mexico on Tuesday.
WTI crude oil surges to as high as 38.97 so far. The break of 4 hour 55 day EMA suggests that pull back from 43.50 might have completed at 35.98 already. Focus is now on 39.42 minor resistance. Firm break there would confirm the start of a rising leg inside the consolidation from 43.50.
Overall, even in case of further rise, we don’t expect a break of 43.50 for the near term. Strong support should be seen from 34.36 in case of another decline. Range trading will continue between 34.36/43.50 until further development.