WTI Crude Oil Surges to Retest 4-Week Highs After EIA Report

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The price of oil on Friday surged to retest the current 4-week highs of about $41.40  after a positive EIA report in mid-week. The upward momentum appears to be limited though amid increasing cases of COVID-19 pandemic.

The oil price is now trading closer to overbought levels of the 14-hour RSI in the 60-min chart. It has surged a few levels above both the 100-hour and the 200-hour SMA lines. A temporary pullback could be on the cards.

WTI Crude Oil Fundamentals Overview

The price of oil is trading at the back of a relatively busy period in the US market. From a global perspective, the demand for oil remains squeezed amid a fresh wave of COVID-19. However, members of OPEC+ have put measures to ensure that oil prices do not experience a plunge like the one witnessed between March and April. More supply cuts are lined up to make sure that the price of light crude oil does not experience a catastrophic collapse.

In the US, WT Crude oil output appears to be in the favor of oil prices following the latest API and EIA reports. Earlier in the week, the US API crude oil stock balances for the week ending Oct. 9 came in at -5.42M barrels. This was a massive improvement from the previous week’s balance of 0.951M barrels. In mid-week, the EIA Crude Oil stocks change report for last week showed a change of -3.818M barrels. This was better than the market expectations of -2.835M barrels.

WTI Crude Oil Technical Analysis (the 60-min Chart)

Technically, the WTI Crude oil appears to have recently completed the formation of an inverted head-and-shoulders pattern. This comes following the sharp fall in oil prices at the start of September. It could indicate a potential reversal in favor of the bulls.

They will be targeting short-term profits at around $41.45 or higher at $42.00. On the other hand, the bears will look to pounce for profits at around $40.45 or lower at $39.81.

WTI Crude Oil Technical Analysis (the Daily Chart)

In the daily chart, the WTI Crude oil appears to be facing strong resistance on its way up around the 61.80% fib level. It continues to trade slightly below this level. It is pinned between the 100-hour and the 200-hour SMA lines.

The bulls will be targeting long-term profits at around 76.40% fib level at $51.67 or higher at $59.51. On the other hand, the bears will look to pounce for profits at around 50% and 38.20% fib levels at $35.93 and $29.11, respectively.

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