WTI Crude Oil Looks To Extend Yearly Highs After US Cuts Production

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The WTI Crude oil advanced to new yearly highs on Wednesday following the latest report from the US Energy Information Administration.  The price of WTI Crude oil, popularly known as light crude oil in the commodities market broke through this year’s high on Friday and edged upwards to trade at $58.00 per barrel.  The price of crude oil had been trading within a tight range of $55.00 to $57.00 since late February but now it appears to have broken the top barrier.

WTI Crude Oil Fundamental Analysis

This week’s US Energy Information Administration (EIA) reports showed that the US had cut oil production forecast for the first time in six months and this sent the price of oil rallying towards the $58.00 level.

The EIA lowered its 2019 forecast to 12.3 million barrels a day, reflecting a reduction of 110,000 barrels per day from its initial forecast. And in 2020, production now is forecasted at 13.03 million barrels per day, which is about 170,000 barrels lower compared to the forecast last month.

WTI Crude Oil Technical Analysis (the 240-min Chart)

From a technical perspective, the price of oil appears to have crossed the lower 50% line in Andrew’s pitchfork, heading towards the median line. This supports a bullish outlook in the short-term as demonstrated on the 240-min chart.

However, the bears will be hoping for an immediate pullback, and they could target profits at $56.76 should this happen. On the other hand, the bulls will be hoping that the current upward momentum takes the pair towards the $60.00 level.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the price of WTI Crude oil again appears to enjoy a bullish momentum going into the latter stages of the week. In this case, the 50% Fib level could be a good target for profits for the bulls as they again target the $60.00 price level.

On the other hand, the bears will look to pounce by targeting an unlikely pullback that could peg the WTI Crude oil back towards the key support zone at $55.00-$56.00.

In summary, the WTI Crude oil appears to be on a short-term recovery that is probably limited to the $60.00 price level. Despite the current rally, the bears will be optimistic going into the latter stages of the week, while the bulls will look to maintain control.

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