Commodities Watchlist: WTI Crude Oil Is Pulling Back To A Previous Area of Interest

A lack of top-tier economic data releases meant that traders had a lot of time to process a few oil-related updates.

For starters, French President Macron was overheard spilling the T to POTUS Biden that the UAE is at maximum production capacity, and that Saudi Arabia can maybe increase its output by 150 thousand barrels a day but not any more in six months time.

Not good since markets were eyeing the UAE and Saudi Arabia’s spare capacity to make up for the decrease in Russia’s oil supply.

WTI Crude Oil 4-hour Chart

Meanwhile, Libya’s National Oil Corp said it might declare force majuere on oil exports from several key export terminals in the Gulf of Sirte amid continued blockades and closures of oil-producing and export infrastructure.

Ecuador’s Energy Ministry also said the country could suspend oil output completely amid anti-government protests.

And then there’s the G7 countries’ plans to put a cap on Russia’s oil exports. While it will limit one of Russia’s income sources, it may also reduce the available global supplies.

The prospect of a tighter crude oil supply boosted WTI crude oil prices above the $110.00 mark.

How high can prices fly this week?

WTI is approaching the $112.00 – $14.00 area that lines up with not only the 100 and 200 SMAs but also the 50% Fibonacci retracement of June’s downswing AND the broken trend line support on the 4-hour time frame.

Stochastic is also giving us bearish vibes as it hangs out in the overbought area.

If the technical resistance zone does its job and prevents further gains, then we could see WTI dip back down to its June lows.

You gotta make sure that you’re seeing a bearish momentum before you sell the Black Crack though!

If the bullish pressure gains momentum, then WTI could jump back above the trend line support and go back to its uptrend.

WTI could go back to its $122.00 highs or even make new monthly highs.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

Leave a Comment