U.S. West Texas Intermediate crude oil rose to its highest level since April 9 on Thursday, supported by two weeks of lower crude inventories, OPEC and US production cuts and signs of a pick-up in demand due to the relaxing of coronavirus-related lockdowns and restrictions.
“Global supply has been curtailed to a great degree,” said Rystad Energy analyst Paola Rodriguez Masiu. “We are on a clear path to a gradual recovery now.”
OPEC, Russia and other major producers, known as OPEC+, agreed to cut supply by a record 9.7 million barrels per day from May 1. So far in May, OPEC+ has cut oil exports by about 6 million bpd, according to companies that track the flows, suggesting a strong start in complying with the deal.
There was also a sign this week the supply glut is easing, U.S. crude inventories fell 5 million barrels last week. Analysts had expected an increase.
At 18:54 GMT, July WTI crude oil is trading $33.87, up $0.35 or +1.28%.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart, but momentum is trending higher. A trade through $35.18 will change the main trend to up. A move through $17.27 will signal a resumption of the downtrend.
The minor trend is up. This is controlling the momentum. A trade through $24.38 will change the minor trend to down.
The main range is $54.86 to $17.27. Its retracement zone at $36.07 to $40.50 is the primary upside target.
The short-term range is $35.18 to $17.27. Its retracement zone at $28.34 to $26.23 is the primary downside target.
The key number to watch into the close on Thursday is yesterday’s close at $33.49.
A sustained move over $33.49 will indicate the presence of buyers. If this creates enough near-term momentum then look for the rally to possibly extend into the main top at $35.18, followed by the main 50% level at $36.07.
A close under $33.49 on Thursday will form a potentially bearish closing price reversal top. If confirmed, this could lead to a 2 to 3 day correction.
This article was originally posted on FX Empire
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