WTI Crude Oil Price Analysis for Sept. 28, 2020

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WTI crude oil has formed lower highs and higher lows to consolidate inside a symmetrical triangle on its 4-hour chart. Price is approaching the peak of the formation to signal that a breakout is imminent.

A move past the triangle top around $40.50 per barrel could be enough to indicate that bulls have won over and that a rally of the same height as the chart formation could follow. Similarly, a candle closing below support around $39.50 per barrel could set off a drop of the same size or around $5.00.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that support is more likely to break than to hold. The gap between the indicators is widening to reflect stronger bearish momentum, and the 200 SMA is close to the triangle top to add another layer of resistance.

Stochastic is treading lower without even reaching the overbought zone, suggesting that sellers are eager to return while buyers take a break. RSI also appears to be topping out and ready to move south, so price could follow suit.

Crude oil markets have been flat for quite some time as traders await more directional clues. On the one hand, demand could see another leg lower as the number of confirmed COVID-19 cases are picking up in several areas. Supply could also see a boost as Libya has restarted production after the end of a blockade.

NOC’s chairman Mustafa Sanalla said:

“Our main concern is to start production and exports taking into account the safety of workers and operations, as well as to prevent any attempts to politicize the national oil sector, which means that the NOC is doing its technical and non-political mission to resume operations in the safe areas and a technical evaluation is under way in preparation for the start of production and exports.”

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